Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national
homebuilder, and GSO Capital Partners LP ("GSO"), the credit arm of
Blackstone (NYSE:BX), announced today a $175 million increase to
their land banking arrangement.
Funds managed by GSO expect to acquire a portfolio of land
parcels from Hovnanian and option finished lots on a monthly
takedown basis back to Hovnanian. As of November 30, 2015, GSO has
closed on one land parcel totaling 186 lots with total acquisition
and future development costs of $24.2 million. GSO and Hovnanian
have also entered into a non-binding letter of intent to land bank
a portfolio of assets totaling approximately $95 million of land
acquisition and future development costs with the expectation to
close prior to December 31, 2015.
Over the next six months, GSO and Hovnanian will jointly
evaluate other land banking opportunities totaling up to an
additional $55 million in acquisition and development costs.
"GSO has been a great land banking partner for us since the
summer of 2012 and we are excited about the opportunity to expand
our land banking arrangement with them," said Ara Hovnanian,
Chairman of the Board of Directors, President and Chief Executive
Officer of Hovnanian Enterprises, Inc. "This increase in our land
banking arrangement with GSO provides our Company with additional
liquidity. Simultaneously, we maintain control of the land
parcels by entering into an option agreement for finished lots
on a just-in-time basis."
Ryan Mollett, Managing Director of GSO, said, "We couldn't be
more pleased with our land banking relationship with Hovnanian.
This is a compelling strategic and financial transaction for both
of our companies and we look forward to continuing to work with
Hovnanian."
ABOUT HOVNANIAN ENTERPRISES®, INC.:
Hovnanian Enterprises, Inc., founded in 1959 by Kevork S.
Hovnanian, is headquartered in Red Bank, New Jersey. The Company is
one of the nation's largest homebuilders with operations in
Arizona, California, Delaware, Florida, Georgia, Illinois,
Maryland, Minnesota, New Jersey, North Carolina, Ohio,
Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and
West Virginia. The Company's homes are marketed and sold under the
trade names K. Hovnanian® Homes®, Brighton Homes® and Parkwood
Builders. As the developer of K. Hovnanian's® Four Seasons
communities, the Company is also one of the nation's largest
builders of active adult homes.
Additional information on Hovnanian Enterprises, Inc., including
a summary investment profile and the Company's 2014 annual report,
can be accessed through the "Investor Relations" section of the
Hovnanian Enterprises' website at http://www.khov.com. To be added
to Hovnanian's investor e-mail list please send an e-mail to
IR@khov.com or sign up at http://www.khov.com.
ABOUT GSO CAPITAL PARTNERS LP:
GSO Capital Partners LP is the global credit investment platform
of Blackstone. With approximately $81 billion of assets under
management, GSO is one of the largest alternative managers in the
world focused on the leveraged-finance, or non-investment grade
related, marketplace. GSO seeks to generate attractive
risk-adjusted returns in its business by investing in a broad array
of strategies including mezzanine debt, distressed investing,
leveraged loans and other special-situation strategies. Its funds
are major providers of credit for small and middle-market companies
and they also advance rescue financing to help distressed
companies.
FORWARD-LOOKING STATEMENTS
All statements in this press release that are not
historical facts should be considered as "forward-looking
statements." Such statements involve known and unknown risks,
uncertainties and other factors that may cause actual results,
performance or achievements of the Company to be materially
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Although we
believe that our plans, intentions and expectations reflected in,
or suggested by, such forward looking statements are reasonable, we
can give no assurance that such plans, intentions, or expectations
will be achieved. Such risks, uncertainties and other factors
include, but are not limited to, (1) changes in general and local
economic and industry and business conditions and impacts of the
sustained homebuilding downturn, (2) adverse weather and other
environmental conditions and natural disasters, (3) changes in
market conditions and seasonality of the Company's business, (4)
changes in home prices and sales activity in the markets where the
Company builds homes, (5) government regulation, including
regulations concerning development of land, the home building,
sales and customer financing processes, tax laws, and the
environment, (6) fluctuations in interest rates and the
availability of mortgage financing, (7) shortages in, and price
fluctuations of, raw materials and labor, (8) the availability and
cost of suitable land and improved lots, (9) levels of competition,
(10) availability of financing to the Company, (11) utility
shortages and outages or rate fluctuations, (12) levels of
indebtedness and restrictions on the Company's operations and
activities imposed by the agreements governing the Company's
outstanding indebtedness, (13) the Company's sources of liquidity,
(14) changes in credit ratings, (15) availability of net operating
loss carryforwards, (16) operations through joint ventures with
third parties, (17) product liability litigation, warranty claims
and claims by mortgage investors, (18) successful identification
and integration of acquisitions, (19) significant influence of the
Company's controlling stockholders, (20) changes in tax laws
affecting the after-tax costs of owning a home, (21) geopolitical
risks, terrorist acts and other acts of war, and (22) other factors
described in detail in the Company's Annual Report on Form 10-K for
the year ended October 31, 2012. Except as otherwise required by
applicable securities laws, we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a
result of new information, future events, changed circumstances or
any other reason.
CONTACT: J. Larry Sorsby
Hovnanian Enterprises, Inc.
Executive Vice President & CFO
Jeffrey T. O'Keefe
Hovnanian Enterprises, Inc.
Vice President, Investor Relations
732-747-7800
Peter Rose
Blackstone
Senior Managing Director, Global Public Affairs
212-583-5871
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