Hovnanian Enterprises Inc. of Red Bank, N.J., New Jersey's largest home builder, could go out of business "absent a miracle" that bolsters its equity and cash reserves, Vicki Bryan, a bond analyst at Gimme Credit LLC said. Hovnanian denied it was in trouble.

"In 2008, builders generated billions of dollars in tax refunds, asset sales and in savings by not buying land for development," Ms. Bryan wrote in a report published Friday. "These lucrative sources will not be available on the same scale this year, and there is little room to cut costs as revenue declines further."

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