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.