Davis Polk & Wardwell LLP advised Credit Suisse Securities (USA) LLC and Citigroup Global Markets Inc. as joint book-running managers and representatives of the initial purchasers on a Rule 144A and Regulation S offering by K. Hovnanian Enterprises, Inc. of $785 million principal amount of 10⅝% senior secured notes due 2016. The notes are guaranteed by Hovnanian Enterprises, Inc. and substantially all of its subsidiaries, and are secured on a first-priority lien basis by substantially all the assets owned by K. Hovnanian Enterprises and the guarantors. The net proceeds of the offering were used to fund tender offers by K. Hovnanian Enterprises for any and all of its 11½% senior secured notes due 2013 and 18% senior secured notes due 2017, and for certain of its senior unsecured notes. In connection with the tender offers, K. Hovnanian Enterprises solicited consents to amend certain provisions of the indentures governing the secured notes. Davis Polk advised Credit Suisse Securities (USA) LLC as dealer manager for the tender offers and consent solicitations. As a result of the offering, K. Hovnanian Enterprises terminated its revolving credit facility.

K. Hovnanian Enterprises, Inc. is a subsidiary of Hovnanian Enterprises, Inc., which is headquartered in Red Bank, New Jersey, and is one of the nation’s largest builders of residential homes.

The Davis Polk corporate team included partner Michael Kaplan and associates Jeff Ramsay, John T. Rudy and Pavan Jawanda. The credit team included partner Bjorn Bjerke and associates Melba Ethel Kapesa and Angela W. Cho (not yet admitted). The real estate team included counsel Susan D. Kennedy and associate Alan R. Lewis. Partner Gail A. Flesher provided environmental advice. Partner Lucy W. Farr and associates Joanna Mork and Juelle Gomes (not yet admitted) provided tax advice. Amarilys Katy Barbosa, Richard A. Harrison and Rana S. Ramjas were the legal assistants for the transaction. All members of the Davis Polk team are based in the New York office.