Hovnanian Enterprises and GSO Capital Partners Announce $125 Million Increase of Land Banking Arrangement

Fri Nov 2, 2012 8:00am EDT

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RED BANK, N.J. and NEW YORK, Nov. 2, 2012 (GLOBE NEWSWIRE) -- Hovnanian Enterprises, Inc. (NYSE:HOV), a leading national homebuilder, and GSO Capital Partners LP ("GSO"), the credit arm of The Blackstone Group (NYSE:BX), announced today an increase of their land banking arrangement for an additional $125 million, which brings the total arrangement since July 2012 to $250 million.

During the next twelve months, GSO and Hovnanian anticipate identifying land parcels for an additional $125 million in acquisition and development costs. Funds managed by GSO will acquire a portfolio of land parcels and option finished lots on a quarterly takedown basis back to Hovnanian.

"We are thrilled to announce an extension of our partnership with GSO," commented Ara Hovnanian, Chairman of the Board of Directors, President and Chief Executive Officer of Hovnanian Enterprises, Inc.  "The land banking structure allows us to effectively control land on a just-in-time basis. The increase in our land banking arrangement with GSO allows us to participate to an even greater extent in buying attractive land opportunities by leveraging outside capital.  This frees up our cash position and enables us to make additional land investments."

Doug Ostrover, Founding Member and Partner of GSO, said, "Given the successful start of our land banking agreement, we are excited to increase our investment in the residential real estate market. Hovnanian has been an excellent partner and given the tremendous growth opportunities in the residential market today, we are convinced that we have teamed up with a great company at the right time in the cycle. We are hopeful that this is just one more step in a long and mutually beneficial relationship 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(R) Homes(R), Matzel & Mumford, Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes. As the developer of K. Hovnanian's(R) 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 2011 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 or fax lists, please send an e-mail to IR@khov.com or sign up at http://www.khov.com.

The Hovnanian Enterprises, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7499

ABOUT GSO CAPITAL PARTNERS LP:

GSO Capital Partners LP is the global credit platform of The Blackstone Group L.P. (NYSE:BX).  GSO, together with its affiliates, has approximately $55 billion of assets currently under management and is one of the largest credit-oriented alternative managers in the world and a major participant in the leveraged finance marketplace.   GSO seeks to generate superior risk-adjusted returns in its credit business by investing in a broad array of strategies including mezzanine, distressed investing leveraged loans and other special situation strategies.

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, 2011 and the Company's Quarterly Report on Form 10-Q for the quarterly period ended April 30, 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
         
         GSO Capital Partners LP
         Peter Rose
         Blackstone
         Senior Managing Director, Global Public Affairs
         212-583-5871
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