This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

S&P Eying Possible Ratings Upgrade For Hovnanian

NEW YORK (AP) â¿¿ Standard & Poor's Ratings Services said Wednesday that it has placed its debt ratings for Hovnanian Enterprises Inc. under review for a possible upgrade, citing the homebuilder's bid to raise $887 million in new debt as part of a refinancing effort.

The ratings agency set its ratings on the builder, including its non-investment grade, "CCC-" corporate credit rating, under review. That means S&P expects it will raise the rating to "CCC+" when Hovnanian completes its proposed refinancing.

Hovnanian has announced plans to raise $797 million of new first-lien and second-lien secured notes due in 2020. The builder also plans to sell $90 million of convertible notes due in 2017.

The company wants to refinance $797 million in 10.625 percent first-lien senior secured notes due in 2016.

If the proposed transaction goes through, it should reduce the builder's interest burden by $15 million to $20 million, said S&P credit analyst George Skoufis.

"The refinancing will lengthen the company's debt tenor by addressing the bulk of its 2016 debt maturities and reducing significant refinancing risk from $1 billion to $218 million," Skoufis said.

The ratings agency also noted that Hovnanian's operating performance has improved, helping to narrow the builder's losses.

After a dismal 2011, homebuilders have seen their fortunes begin to turn around this year as the housing recovery has steadily gained momentum.

Sales of both new and previously occupied homes are running ahead of last year. Home prices are increasing more consistently, in part because the supply of homes has shrunk and foreclosures have eased. And mortgage rates remain near record lows, beckoning potential buyers with good credit.

The housing market isn't expected to recover fully until job growth improves and the unemployment rate, now at 8.1 percent, declines further. But the gradual increase in homebuyer demand has helped builders like Hovnanian.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs