The Firm represented Hovnanian Enterprises, Inc., one of the nation’s largest builders of residential homes and a long-standing client of the firm, in a series of major capital restructuring and capital-raising transactions that were completed during the month of May.
Led by Jen Hobbs and Marisa Stavenas, the Firm represented Hovnanian in the complete restructuring of its bank credit and high-yield debt profile. The high-yield and bank restructuring transactions, which were cross-conditioned on one another, included an amendment to Hovnanian’s Senior Secured Revolving Credit Agreement and a Rule 144A/Reg S offering of $600 million Senior Secured Notes due 2013. The Amended Senior Secured Revolving Credit Agreement (which had previously been secured by only a portion of Hovnanian’s assets) will be secured by a first-priority lien on substantially all of the assets of Hovnanian and its subsidiaries, and, in a relatively rare structure for the high-yield market, the Senior Secured Notes will be secured by a second-priority lien on these assets.
Essentially in parallel to these transactions, Hovnanian sold, in a registered public offering, 14,000,000 shares of its Class A Common Stock, resulting in gross proceeds of approximately $133 million. This offering was Hovnanian’s first public offering of common stock since its IPO in 1983.
In addition to Marisa and Jen, the Simpson Thacher teams, for the common stock offering included Vince Pagano, Simone Bono and Ryan Gavin (Securities), Adeeb Fadil (Environmental), Jonathan Cantor and Jennifer Klein (Tax) and Jeanne Annarumma (ERISA), with valuable assistance from paralegal Emily Farquharson, and for the debt restructuring transactions, included Vince Pagano, Ryan Bekkerus, Ryan Gavin and Nathan Chaney (Securities), Erik Hepler and Mark Maher (Banking and Credit), Mark Thompson (Bankruptcy), Mardi Merjian (Real Estate), Adeeb Fadil (Environmental), Jonathan Cantor and Jennifer Klein (Tax) and Jeanne Annarumma (ERISA), with valuable assistance from summer associate Julia Gaffin and paralegal Emily Farquharson.