As part of the financing, the company’s wholly-owned subsidiary, K. Hovnanian Enterprises, entered into credit agreements, dated January 29, 2018, with GSO that provided a senior unsecured term loan credit facility, consisting of $132.5 million of initial term loans, and up to $80 million of delayed draw term loans available to refinance 8.00% 2019 notes that remain outstanding following the consummation of the exchange offer of its notes. The company also closed a a senior secured first lien revolving credit facility of up to $125 million of senior secured first priority revolving loans to refinance its current $75 million first priority secured term loan and for general corporate purposes.
On February 1, 2018, K. Hovnanian closed on the borrowing of $132.5 million of initial term loans, the proceeds of which were used to redeem, on February 1, 2018, all of K. Hovnanian’s outstanding $132.546 million aggregate principal amount of 7.00% senior notes due 2019. Other borrowings under these credit facilities will be available on the dates and subject to the terms and conditions set forth therein.
“We are pleased to have successfully closed this transaction and with significant participation in the exchange offer,” stated Ara K. Hovnanian, chairman of the board, president and CEO. “This refinancing will provide us with much-needed financial flexibility and additional liquidity to help continue growing our business. Since our next significant maturity is not until the end of 2021, we will be focusing with increased concentration on reloading our land position, executing to our business plan and further improving our operating results.”
Red Bank, NJ-based Hovnanian Enterprises is one of the nation’s largest homebuilders.