Hovnanian Enterprises completes $900 million senior notes offering and debt refinancing

Hovnanian Enterprises, Inc. (NYSE:HOV), currently valued at $767 million in market capitalization, announced Thursday that its wholly owned subsidiary, K. Hovnanian Enterprises, Inc., completed a private placement of $900 million in senior notes. According to InvestingPro data, the company maintains a healthy financial position with a "GOOD" overall health score. The offering consisted of $450 million of 8.000% Senior Notes due 2031 and $450 million of 8.375% Senior Notes due 2033. The notes are guaranteed by Hovnanian Enterprises and most of its subsidiaries, excluding certain mortgage, title insurance, and joint venture entities.

According to the company’s statement in an SEC filing, the 2031 Notes mature on April 1, 2031, and the 2033 Notes mature on October 1, 2033. Interest on both series is payable semi-annually on April 1 and October 1, beginning April 1, 2026.

The notes may be redeemed at the company’s option under specified terms. The 2031 Notes are redeemable at 100% of principal plus a make-whole premium before April 1, 2028, and at set premiums declining to 100% after April 1, 2030. Similarly, the 2033 Notes are redeemable at 100% of principal plus a make-whole premium before October 1, 2028, with premiums declining to 100% after October 1, 2030. Up to 40% of each series may be redeemed at a premium with proceeds from certain equity offerings before 2028.

The net proceeds, together with cash on hand, were used to redeem the company’s outstanding 11.75% Senior Secured 1.25 Lien Notes due 2029, satisfy and discharge its 8.0% Senior Secured 1.125 Lien Notes due 2028, and repay in full its Senior Secured 1.75 Lien Term Loan Facility due 2028. The company stated that all liens on collateral securing the redeemed notes and term loan were released, and related guarantees were discharged.

Also on Thursday, previously disclosed amendments to Hovnanian’s credit agreement became effective, providing for a revolving credit facility of up to $125 million.

This information is based on a statement in the company’s Form 8-K filing with the Securities and Exchange Commission.

In other recent news, Hovnanian Enterprises reported its third-quarter 2025 earnings, revealing a significant miss on both earnings per share (EPS) and revenue forecasts. The company posted an EPS of $1.99, which was below the expected $3.51, and revenue came in at $800.58 million, slightly under the forecasted $806.2 million. Additionally, Hovnanian Enterprises announced a $900 million senior notes offering through its subsidiary, K. Hovnanian Enterprises. This offering includes $450 million in 8.000% Senior Notes due 2031 and another $450 million in 8.375% Senior Notes due 2033, with the transaction expected to close around September 25, 2025.

Moreover, Hovnanian Enterprises set new compensation packages for its incoming president and COO, Alexander Hovnanian and Michael Wyatt, effective November 1, 2025. Both executives will receive an annual base salary of $750,000 and a target long-term incentive program award equal to 1.25 times their base salary. These developments highlight significant financial and organizational updates for Hovnanian Enterprises.

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