This offer of bonds by the homebuilder Hovnarian (ticker HOV) is in my opinion a steal.
NEW YORK (Dow Jones)--K. Hovnanian Enterprises Inc., a wholly owned subsidiary of Hovnanian Enterprises Inc. (HOV), priced $785 million of senior secured first-lien notes in a private placement via lead bookrunners Credit Suisse and Citi, according to a person familiar with the matter. Terms were as follows:
Amount: $785 million Maturity: Oct. 15, 2016 Coupon: 10.625% Issue Price: 98.208 Yield: 11.0% Spread: 821 basis points over Treasurys Settlement: Oct. 20, 2009 (T+10) Call: Noncallable for 3 years Ratings: B1(Moody's Investors Service) CCC+ (Standard & Poor's)
Proceeds, together with cash on hand, will fund the company's previously announced tender offers for its outstanding second- and third-lien senior secured notes and certain series of senior unsecured notes.
-By Michael Aneiro, Dow Jones Newswires; 212-416-2203; email@example.com
What is there not to like about these bonds?
EIGHT HUNDRED AND TWENTY ONE BASIS POINTS OVER TREASURIES
Noncallable for three years.
The cash raised will be wisely used.
I like these bonds---a whole lot.
Robert J. Abalos, Esq.