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Hovnanian Enterprises, Inc. Announces Proposed Public Offerings Of Class A Common Stock, Tangible Equity Units And Senior Unsecured Notes

RED BANK, N.J., Jan. 31, 2011 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) (the "Company") announced today the commencement of registered underwritten public offerings of Class A Common Stock, tangible equity units and senior unsecured notes. The offerings are anticipated to consist of the issuance of $50 million of the Company's Class A Common Stock, 3,000,000 tangible equity units, each with a stated amount of $25 and comprised of a prepaid stock purchase contract issued by the Company and a senior subordinated amortizing note due 2014 issued by K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), the Company's wholly-owned subsidiary, and $150 million aggregate principal amount of senior unsecured notes due 2015 issued by K. Hovnanian (the "Notes"). In addition, the Company intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares of Class A Common Stock and tangible equity units sold to cover over-allotments. None of the offerings is contingent upon completion of any of the other offerings and each of the offerings is being conducted as a separate public offering.

J.P. Morgan, Credit Suisse, BofA Merrill Lynch and Citi are serving as the joint book-running managers for the Class A Common Stock offering and Wells Fargo Securities is serving as co-manager. Credit Suisse, Citi and J.P. Morgan are serving as the joint book-running managers for the tangible equity units offering and BofA Merrill Lynch, Deutsche Bank Securities and Wells Fargo Securities are serving as co-managers. Credit Suisse, Citi, Deutsche Bank Securities and J.P. Morgan are serving as the joint book-running managers for the Notes offering.

The Company and K. Hovnanian intend to use the net proceeds of the offerings to fund the purchase of K. Hovnanian's 8% Senior Notes due 2012, 8⅞% Senior Subordinated Notes due 2012 and 7¾% Senior Subordinated Notes due 2013 pursuant to tender offers for such securities, which are being commenced today by a separate press release, and by redemption to the extent such notes are not purchased in the tender offers. The remainder of the net proceeds will be used for general corporate purposes.

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