Hedge fund Solus Alternative Asset Management LP decided to settle its legal battle with Hovnanian Enterprises Inc. and private equity giant Blackstone Group LP's GSO Capital Partners LP regarding the homebuilder's contentious debt refinancing.
Solus filed a lawsuit against the two companies earlier in 2018 regarding an alleged manipulation of the credit default swaps market on insurance tied to Hovnanian's debt. Earlier in May, Goldman Sachs Group Inc. and Blackstone reportedly resolved a standoff regarding a controversial derivatives trade on bonds issued by Hovnanian.
Solus said in a May 30 release that under the terms of the settlement, GSO has agreed to consent to the indenture amendments necessary to allow Hovnanian to make the interest payment that it did not make to its own unit May 1, before the grace period's expiration, noting that Hovnanian has now made the payment.
GSO has also agreed not to back any future failure to pay events impacting Hovnanian, Solus added.
