Bloomberg News

Hovnanian Secured Debt Yields Soar to 18.5% After Exchange Offer

September 30, 2011

Sept. 30 (Bloomberg) -- Hovnanian Enterprises Inc.’s senior secured bonds are yielding 18.5 percent after the largest homebuilder in New Jersey announced exchange offers for up to $220 million of securities.

The company’s $797 million of 10.625 percent notes due in October 2016 tumbled 4.4 cents to 75 cents on the dollar as of 10:31 a.m. in New York after a 5.3 cents drop yesterday, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The debt was yielding 15 percent on Sept. 27, the data show.

The Red Bank, New Jersey-based homebuilder is offering to exchange senior notes with coupons ranging from 6.25 percent to 11.875 percent and maturities from 2014 through 2017 for up to $220 million of new 2 percent senior secured bonds due 2021, according to a statement distributed by Globe Newswire on Sept. 28. Hovnanian said the offer will expire on Oct. 26 and that the early tender and consent time is at 5 p.m. in New York on Oct. 12.

To contact the reporter on this story: Sapna Maheshwari in New York at

To contact the editor responsible for this story: Pierre Paulden at

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