Hovnanian Announces Pricing Of $280.5 Million Aggregate Offerings Of Common Stock, Tangible Equity Units And Senior Unsecured Notes

RED BANK, N.J., Feb. 4, 2011 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) (the "Company") announced today that it priced its previously announced offering of $50.5 million of its Class A Common Stock at $4.30 per share, resulting in net proceeds of approximately $47.7 million. The Company and K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), the Company's wholly-owned subsidiary, also priced their offering of 3.0 million 7.25% tangible equity units, each with a stated amount of $25.00, resulting in net proceeds of approximately $72.5 million. K. Hovnanian's 11.875% senior unsecured notes due 2015 were priced at 97.453% of the $155.0 million aggregate principal amount to be issued, resulting in net proceeds of approximately $147.9 million. The Company has granted the underwriters of the Class A Common Stock and tangible equity units offerings a 30-day option to purchase up to an additional 1.7625 million shares of Class A Common Stock and 450,000 tangible equity units, respectively, to cover over-allotments. The senior unsecured notes offering is conditioned upon the completion of the Class A Common Stock offering and the tangible equity units offering, but neither the Class A Common Stock offering nor the tangible equity units offering is conditioned upon the completion of each other or the senior unsecured notes offering. Each offering is subject to customary closing conditions.

Each tangible equity unit is comprised of a prepaid stock purchase contract issued by the Company and a senior subordinated amortizing note due 2014 issued by K. Hovnanian. Each prepaid stock purchase contract has a mandatory settlement date of February 15, 2014 (subject to postponement in limited circumstances) and will settle for between 4.7655 and 5.8140 shares of Class A Common Stock (subject to adjustment as described in the final prospectus relating to the tangible equity units offering). The amortizing notes will pay holders equal quarterly cash installments of $0.453125 per amortizing note, which cash payments in the aggregate will be equivalent to 7.25% per year with respect to each $25 stated amount of tangible equity units. The amortizing notes have a final installment payment date of February 15, 2014.