RED BANK, N.J., Sept. 20, 2012 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV) (the "Company") announced today that its wholly-owned subsidiary, K. Hovnanian Enterprises, Inc. ("K. Hovnanian"), priced its previously announced underwritten public offering of 6.00% senior exchangeable note units (the "Units") (the "Units Offering"). The Units Offering consists of the issuance of 90,000 Units, each with a stated amount of $1,000 and each comprised of a zero-coupon senior exchangeable note due December 1, 2017 and a senior amortizing note due December 1, 2017. The notes comprising the Units will be guaranteed by the Company and certain of its subsidiaries. In addition, K. Hovnanian granted the underwriters a 13-day option to purchase up to an additional 10,000 Units sold to cover over-allotments. K. Hovnanian also priced its previously announced offering of $577.0 million aggregate principal amount of 7.250% senior secured first lien notes due 2020 (the "First Lien Notes") and $220.0 million aggregate principal amount of 9.125% senior secured second lien notes due 2020 (the "Second Lien Notes" and, together with the First Lien Notes, the "Notes") in a private placement (the "Notes Offering").
Each exchangeable note has an initial principal amount of $768.51. The exchange rate will initially be 185.5288 shares of Class A common stock per $1,000 principal amount at maturity of exchangeable notes (equivalent to an initial exchange price, based on $1,000 principal amount at maturity, of approximately $5.39 per share of Class A common stock). The exchange rate will be subject to adjustment as described in the final prospectus supplement related to the Units Offering.
Each senior amortizing note has an initial principal amount of $231.49 per amortizing note and a final installment payment date of December 1, 2017. The amortizing notes will bear interest at an annual rate of 11.00%, paying semi-annual cash installments of $30.00 per amortizing note (except the installment payable on June 1, 2013, which will be $39.83 per amortizing note), which will constitute a payment of interest and a partial repayment of principal, and which in the aggregate will be equivalent to a 6.00% cash payment per year with respect to each $1,000 stated amount of Units.
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