Hovnanian Enterprises Inc (NYSE:HOV) has entered into a credit agreement and refinancing commitment with GSO Capital Partners LP, Blackstone Group LP (NYSE:BX)’s credit platform and certain funds advised or managed by it to refinance some of the firm’s debt securities maturing next year and to buy $25 million of the firm’s secured debt securities. Pertaining to this deal, the firm will close certain debt securities becoming due in the imminent 1-2 years, which will be substituted with longer-term financing.
Besides these refinancing commitments, the GSO parties have assured to offer Hovnanian with a new senior secured primary lien revolving credit facility worth $125 million. The firm plans to use $75 million from this facility to refinance its existing $75 million top priority secured term loan following the expiration of no-call period in September 2018. The leftover part of the credit facility will be accessible to the firm for general corporate uses and offer the firm with increased financial flexibility.
Hovnanian’s Board of Directors and senior management thoroughly assessed a range of available alternatives to strategically manage the firm’s debt obligations, with numerous financial companies competing to refinance the firm’s current debt. After due diligence and careful review, the firm decided to follow the refinancing deals with GSO.
Ara Hovnanian, the President, Chairman and CEO of Hovnanian, expressed that they continue to implement initiatives to de-risk their balance sheet and improve their financial flexibility in support of their long-term operations. They are delighted to move into these refinancing and financing deals with affiliates of GSO, which is the credit platform of Blackstone Group, one of the distinguished investment entities in the world.
In the last trading session, the stock price of Hovnanian Enterprises declined 0.90% to close the day at $3.29. The decline came at a share volume of 3.11 million compared to average share volume of 1.78 million.