Hovnanian subsidiary plans to offer $900 million in senior notes

MATAWAN, N.J. - K. Hovnanian Enterprises, Inc., a wholly owned subsidiary of Hovnanian Enterprises, Inc. (NYSE:HOV), a homebuilder with $3.1 billion in annual revenue and current market capitalization of $821 million, announced Wednesday its intention to offer $900 million in senior notes through a private placement, subject to market conditions. According to InvestingPro analysis, the company currently trades at an attractive P/E ratio of 6.7x and maintains strong liquidity metrics.

The offering consists of $450 million in senior notes due 2031 and $450 million in senior notes due 2033. The notes will be guaranteed by Hovnanian Enterprises and substantially all of its subsidiaries.

According to the press release statement, K. Hovnanian plans to use the proceeds to redeem its outstanding 8.0% Senior Secured 1.125 Lien Notes due 2028 at a redemption price of 104.000% of principal amount, and its 11.75% Senior Secured 1.25 Lien Notes due 2029 at 100.000% of principal amount plus an applicable make-whole premium.

The company also intends to repay all outstanding loans under its Senior Secured 1.75 Lien Term Loan Facility due 2028 at par, plus accrued interest, and cover fees and expenses related to the transactions.

The notes have not been registered under the Securities Act of 1933 and are being offered only to qualified institutional buyers under Rule 144A and to certain persons in offshore transactions under Regulation S.

Hovnanian Enterprises, founded in 1959, operates as a homebuilder in 13 states across the United States. The company markets and sells homes under the K. Hovnanian Homes trade name and develops active lifestyle communities through its Four Seasons communities. With EBITDA of $205 million in the last twelve months, the company appears undervalued according to InvestingPro Fair Value analysis. Discover more insights and 11 additional ProTips about HOV with an InvestingPro subscription, including exclusive access to comprehensive Pro Research Reports covering 1,400+ top US stocks.

The announcement specified that it does not constitute a notice of redemption for the existing secured notes or an offer to sell the new notes in jurisdictions where such offers would be unlawful.

In other recent news, Hovnanian Enterprises reported its third-quarter 2025 earnings, which fell short of analysts’ expectations. The company announced an earnings per share (EPS) of $1.99, which was significantly below the anticipated $3.51, marking a 43.3% negative surprise. Revenue for the quarter was reported at $800.58 million, slightly under the forecasted $806.2 million. Despite missing both earnings and revenue forecasts, Hovnanian’s stock experienced a rise in pre-market trading. The stock increased by 5.4%, reaching $157, although it had previously closed at $148.95. These recent developments have attracted attention from investors and analysts alike.

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