Real Estate Central

RED BANK, N.J., May 16 /PRNewswire-FirstCall/ — Hovnanian Enterprises,
Inc. (NYSE: HOV) announced today that it plans to issue an aggregate
principal amount of up to $600.0 million of 5-year senior secured notes
(the “Notes”) in a private placement. The Company also expects to enter
into an amendment to its revolving credit agreement which decreases total
commitments thereunder to $300.0 million, increases the amount of
collateral, and substantially eliminates maintenance covenants (the “New
Revolving Credit Agreement”). The amendment has been approved by the
Lenders subject to issuance of the Notes.

The Notes would be secured on a second-priority lien basis on
substantially all the assets owned by the Company and guarantors of the
Notes to the extent such assets secure obligations under the New Revolving
Credit Agreement and certain other permitted indebtedness.

The Company intends to use the net proceeds from the offering of the
Notes to repay amounts outstanding under its existing revolving credit
agreement and for general corporate purposes.

The Notes would be offered within the United States only to “qualified
institutional buyers” pursuant to Rule 144A under the Securities Act of
1933, as amended (the “Securities Act”). The Notes would also be offered
outside the United States to non-U.S. investors. The Notes to be offered
would not be registered under the Securities Act and may not be offered or
sold in the United States absent registration or an applicable exemption
from registration requirements. This announcement does not constitute an
offer to sell or the solicitation of an offer to buy such Notes in any
jurisdiction in which such an offer or sale would be unlawful.

About Hovnanian Enterprises

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian,
Chairman, 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, Kentucky, Maryland, Michigan,
Minnesota, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South
Carolina, Texas, Virginia and West Virginia. The Company’s homes are
marketed and sold under the trade names K. Hovnanian Homes, Matzel &
Mumford, Forecast Homes, Parkside Homes, Brighton Homes, Parkwood Builders,
Windward Homes, Cambridge Homes, Town & Country Homes, Oster Homes, First
Home Builders of Florida and CraftBuilt Homes. 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.

Forward-Looking Statements

All statements in this Press Release that are not historical facts
should be considered as “forward-looking statements” within the meaning of
the Private Securities Litigation Reform Act of 1995. 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. Such risks,
uncertainties and other factors include, but are not limited to, (1)
changes in general and local economic and industry and business conditions,
(2) adverse weather 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, 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) operations through joint ventures with third parties,
(14) product liability litigation and warranty claims, (15) successful
identification and integration of acquisitions, (16) significant influence
of the Company’s controlling stockholders, (17) geopolitical risks,
terrorist acts and other acts of war and (18) other factors described in
detail in the Company’s Form 10-K for the year ended October 31, 2007.



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Source: Real Estate Newswire