Hovnanian announces refinancing transaction

Hovnanian Enterprises has entered into an agreement with existing investors to consummate a refinancing transaction that extends the maturities of over $600 million of the Company’s secured debt to the fourth quarters of fiscal 2028 and fiscal 2029. Additionally, it has entered into an agreement with existing lenders to amend and extend its $125 million secured revolving credit facility to mature in June 2026. Transaction Details: The Company will issue and sell in a private placement $225.0 million aggregate principal amount of new 8.0% Senior Secured 1.125 Lien Notes due 2028 and $430.0 million aggregate principal amount of new 11.75% Senior Secured 1.25 Lien Notes due 2029. The Company has called for redemption all outstanding amounts of each series of its existing secured notes consisting of 7.75% Senior Secured 1.125 Lien Notes due 2026, 10.5% Senior Secured 1.25 Lien Notes due 2026, 11.25% Senior Secured 1.5 Lien Notes due 2026 and 10.0% Senior Secured 1.75 Lien Notes due 2025, in each case conditioned upon receipt of the proceeds from the sale of the New Secured Notes. The Company entered into a Third Amendment to the Credit Agreement governing its $125 million secured revolving credit facility which will, among other things, extend the final scheduled maturity thereof by two years to June 30, 2026, upon effectiveness at closing. The transactions are expected to close on October 5, 2023, upon the satisfaction of customary closing conditions.