Friday, July 13, 2012

Hovnanian Enterprises Sells Lots at Stratland Ranch to GSO Capital Partners For $7.95m

VIZZDA—July 13th, 2012 – Hovnanian Enterprises of Red Bank, NJ has completed the sale of 56 finished lots to GSO Capital Partners, the credit affiliate of the Blackstone Group, for $7.95m or $1350 per front foot. The lots consist of twenty nine lots at 90’ x 150’ and twenty seven lots at 125’ x 160’ in a 143-lot, 81.3 acre subdivision zoned SF-10.

This sale is part of a larger land banking agreement between Hovnanian and GSO, whereby GSO provides up to $125m in funding to acquire a portfolio of finished lots and option the acquired properties back to Hovnanian on a quarterly basis. To date, the partnership has acquired six land parcels totaling 620 lots.

GSO also increased their holdings in Hovnanian by exchanging $13.4m outstanding debt in three notes of $3m 7.5% Senior Unsecured Note due 2016, $9.1m 8.625% Senior Notes due 2017 and $1.3m in Senior Subordinated note for 3,398,291 shares of Hovnanian’s Class A Common Stock valued at $2 per share.

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Paul Dionne
Research Analyst

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