×

Hovnanian Enterprises and GSO Capital Partners Announce $175 Million Increase of Land Banking Arrangement

RED BANK, N.J., and NEW YORK, Dec. 3, 2015 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, and GSO Capital Partners LP ("GSO"), the credit arm of Blackstone (NYSE:BX), announced today a $175 million increase to their land banking arrangement.

Funds managed by GSO expect to acquire a portfolio of land parcels from Hovnanian and option finished lots on a monthly takedown basis back to Hovnanian. As of November 30, 2015, GSO has closed on one land parcel totaling 186 lots with total acquisition and future development costs of $24.2 million. GSO and Hovnanian have also entered into a non-binding letter of intent to land bank a portfolio of assets totaling approximately $95 million of land acquisition and future development costs with the expectation to close prior to December 31, 2015.

Over the next six months, GSO and Hovnanian will jointly evaluate other land banking opportunities totaling up to an additional $55 million in acquisition and development costs.

"GSO has been a great land banking partner for us since the summer of 2012 and we are excited about the opportunity to expand our land banking arrangement with them," said Ara Hovnanian, Chairman of the Board of Directors, President and Chief Executive Officer of Hovnanian Enterprises, Inc. "This increase in our land banking arrangement with GSO provides our Company with additional liquidity. Simultaneously, we maintain control of the land parcels by entering into an option agreement for finished lots on a just-in-time basis."

Ryan Mollett, Managing Director of GSO, said, "We couldn't be more pleased with our land banking relationship with Hovnanian. This is a compelling strategic and financial transaction for both of our companies and we look forward to continuing to work with Hovnanian."

ABOUT HOVNANIAN ENTERPRISES®, INC.:

Hovnanian Enterprises, Inc., founded in 1959 by Kevork S. Hovnanian, 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, Maryland, Minnesota, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Texas, Virginia, Washington, D.C. and West Virginia. The Company's homes are marketed and sold under the trade names K. Hovnanian® Homes®, Brighton Homes® and Parkwood Builders. 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.

Additional information on Hovnanian Enterprises, Inc., including a summary investment profile and the Company's 2014 annual report, can be accessed through the "Investor Relations" section of the Hovnanian Enterprises' website at http://www.khov.com. To be added to Hovnanian's investor e-mail list please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

ABOUT GSO CAPITAL PARTNERS LP:

GSO Capital Partners LP is the global credit investment platform of Blackstone. With approximately $81 billion of assets under management, GSO is one of the largest alternative managers in the world focused on the leveraged-finance, or non-investment grade related, marketplace. GSO seeks to generate attractive risk-adjusted returns in its business by investing in a broad array of strategies including mezzanine debt, distressed investing, leveraged loans and other special-situation strategies. Its funds are major providers of credit for small and middle-market companies and they also advance rescue financing to help distressed companies.

FORWARD-LOOKING STATEMENTS

All statements in this press release that are not historical facts should be considered as "forward-looking statements." 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. Although we believe that our plans, intentions and expectations reflected in, or suggested by, such forward looking statements are reasonable, we can give no assurance that such plans, intentions, or expectations will be achieved. Such risks, uncertainties and other factors include, but are not limited to, (1) changes in general and local economic and industry and business conditions and impacts of the sustained homebuilding downturn, (2) adverse weather and other environmental 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, tax laws, 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) the Company's sources of liquidity, (14) changes in credit ratings, (15) availability of net operating loss carryforwards, (16) operations through joint ventures with third parties, (17) product liability litigation, warranty claims and claims by mortgage investors, (18) successful identification and integration of acquisitions, (19) significant influence of the Company's controlling stockholders, (20) changes in tax laws affecting the after-tax costs of owning a home, (21) geopolitical risks, terrorist acts and other acts of war, and (22) other factors described in detail in the Company's Annual Report on Form 10-K for the year ended October 31, 2012. Except as otherwise required by applicable securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

CONTACT: J. Larry Sorsby Hovnanian Enterprises, Inc. Executive Vice President & CFO Jeffrey T. O'Keefe Hovnanian Enterprises, Inc. Vice President, Investor Relations 732-747-7800 Peter Rose Blackstone Senior Managing Director, Global Public Affairs 212-583-5871

Source:Hovnanian Enterprises, Inc.