Simpson Thacher represented Hovnanian Enterprises, Inc. (“Hovnanian”), one of the nation’s largest homebuilders and a long-standing client of the Firm, in connection with its recent financing transactions with certain investors.
As part of the financing transactions, K. Hovnanian Enterprises, Inc., its wholly owned subsidiary (“K. Hovnanian”), completed private placements of senior secured notes as follows: (i) $350 million aggregate principal amount of its newly issued 7.75% Senior Secured 1.125 Lien Notes due 2026 (the “1.125 Lien Notes”) and (ii) approximately $282.3 million aggregate principal amount of its newly issued 10.5% Senior Secured 1.25 Lien Notes due 2026. The proceeds of the 1.25 Lien Notes were used to redeem and satisfy and discharge all of its outstanding 9.5% Senior Secured Notes due 2020, 2% Senior Secured Notes due 2021 and 5% Senior Secured Notes due 2021.
In addition, K. Hovnanian completed private exchanges of (i) approximately $221 million aggregate principal amount of its 10% Senior Secured Notes due 2022 (the “10% Notes”) and approximately $114 million aggregate principal amount of its 10.5% Senior Secured Notes due 2024 (the “10.5% Notes”) for a portion of the $350 million aggregate principal amount of the 1.125 Lien Notes and/or cash, and (ii) approximately $99.7 million aggregate principal amount of the 10.5% Notes for approximately $103.1 million aggregate principal amount of its newly issued 11.25% Senior Secured 1.5 Lien Notes due 2026.
Hovnanian, as guarantor, K. Hovnanian, as borrower, also entered into a senior secured revolving credit agreement with affiliates of certain investment managers that provides for up to $125 million of senior secured first lien revolving loans which will be available for general corporate purposes.
The Simpson Thacher team included Marisa Stavenas, William Brentani, Jon Ozner, Tony Rim, Stephanie Rowan, Seth Lowinger, Juan Gonzalez and Janet Kanzawa (Capital Markets); Bill Sheehan, Harini Mekala and Kal Venkatraj (Banking and Credit); Soogy Lee, Jonathan Pall and Janet Nadile (Restructuring); Marcy Geller, Jonathan Cantor, Sarah Katz, Gal Shemer and Jessica Levy (Tax); Krista McManus and Dennis Loiacono (Real Estate); Marcela Robledo (Intellectual Property); Jamin Koslowe (Executive Compensation and Employee Benefits); Adeeb Fadil (Environmental); and Jennie Getsin (Blue Sky).