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Note 23 - Subsequent Events | 12 Months Ended
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Oct. 31, 2019
Notes to Financial Statements |
Subsequent Events [Text Block] | 23. Subsequent Events On November 5, 2019, K. Hovnanian commenced a private offer to exchange its 10.0% 2022 Notes and its 10.5% 2024 Notes for its newly issued 10.0% 1.75 Lien Notes due 2025 (the “1.75 Lien Notes”). In conjunction with this exchange offer, K. Hovnanian solicited consents to proposed amendments (the “ Proposed Amendments”) from the holders of such Notes to the indenture, dated as of July 27, 2017, among HEI, K. Hovnanian and the other guarantors parties thereto and Wilmington Trust, National Association, as trustee and collateral agent (the “Existing Indenture”), providing for, among other matters, the elimination of most of the restrictive covenants, certain of the affirmative covenants and certain of the events of default contained in such indenture. The Exchange Offers and the Consent Solicitations expired at 11:59 p.m., New York City time, on December 5, 2019. As of the expiration date of the Exchange Offers, K. Hovnanian had received tenders from holders of $23.2 million in aggregate principal amount, or 10.6%, of the 10.0% 2022 Notes and $141.7 million in aggregate principal amount, or 67.0%, of the 10.5% 2024 Notes, all of which were accepted for exchange, and had received the requisite consents in connection with the Consent Solicitation for the 10.5% 2024 Notes. K. Hovnanian did not receive the requisite consents in connection with the Consent Solicitation for the 10% 2022 Notes and therefore the 10.5% 2022 Notes will continue to be subject to the terms of the Existing Indenture without giving effect to the Proposed Amendments. On December 6, 2019, K. Hovnanian, HEI, as guarantor, the other guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent, entered into the Tenth Supplemental Indenture, dated as of December 6, 2019, amending and supplementing the Existing Indenture in respect of the Proposed Amendments, which amendments became operative on the settlement date of the Exchange Offer. On December 10, 2019, K. Hovnanian settled the exchange offer and issued $158.5 million aggregate principal amount of 1.75 Lien Notes and paid cash to exchanging holders in respect of accrued and unpaid interest on the 10.0% 2022 Notes and 10.5% 2024 Notes accepted for exchange to, but not including, the settlement date and, if applicable, amounts due in lieu of fractional amounts of 1.75 Lien Notes. The 1.75 Lien Notes were issued under an Indenture, dated as of December 10, 2019, among HEI, K. Hovnanian, the guarantors party thereto and Wilmington Trust, National Association, as trustee and collateral agent (the “New 2025 Notes Indenture”). The 1.75 Lien Notes are guaranteed by HEI and the Notes Guarantors and the 1.75 Lien Notes and the guarantees thereof will be secured by substantially all of the assets owned by K. Hovnanian and the Notes Guarantors, subject to permitted liens and certain exceptions. The New 1.75 Lien Notes bear interest at 10.0% per annum and mature on November 15, 2025. Interest on the 1.75 Lien Notes is payable semi-annually on May 15 and November 15 of each year, beginning on May 15, 2020, to holders of record at the close of business on May 1 or November 1, as the case may be, immediately preceding each such interest payment date. The New 2025 Notes Indenture contains restrictive covenants that are substantially similar to those contained in the indentures governing the New Secured Notes. In addition, on December 10, 2019, K. Hovnanian, HEI, the other Notes Guarantors party thereto, Wilmington Trust, National Association, as administrative agent, and affiliates of certain investment managers (the “Investors”), as lenders, entered into a credit agreement (the “1.75 Lien Credit Agreement”) providing for $81.5 million of senior secured 1.75 lien term loans (the “1.75 Lien Term Loans”), that were borrowed by K. Hovnanian and guaranteed by the Notes Guarantors in exchange for $163.0 million of K. Hovnanian’s senior unsecured term loans due February 1, 2027 pursuant to an Exchange Agreement, dated December 10, 2019, by and among K. Hovnanian, HEI, the other Notes Guarantors party thereto and the Investors. The 1.75 Lien Term Loans and the guarantees thereof will be secured on a pari passu basis with the 1.75 Lien Notes by the same assets that will secure the 1.75 Lien Notes, subject to permitted liens and certain exceptions. The 1.75 Lien Term Loans will bear interest at a rate equal to 10.0% per annum and will mature on January 31, 2028. The 1.75 Lien Credit Agreement contains representations and warranties and covenants that are substantially similar to those contained in the Secured Credit Agreement.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI http://asc.fasb.org/topic&trid=2122774 + Details
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