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HOV - What ar eyou thinking?

|Includes: HOV, Hovnanian Enterprises, Inc. (HOV)

Hovnanian has an opportunity right now that is looking them right in the face.  They have been actively buying back debt in the open market thru tender offers - I looked at a 7% (or so) bond of there's today that looked like it was trading around 70. 
As they buy in some of their debt at prices ranging between 70-90% of par they continue to ignore their preferred shares that are trading at 23% of par.  HOVNP a $25 par preferred is trading at $5.71 - this preferred is forgotten because right now it is not paying its dividend.  This is where the company has an opportunity, offer the preferred holders a swap for common - similar to what Citibank and other banks have done.  Suppose they offered 2.5 shares of common for preferred, they get to retire the preferred for about 40% of par and they clean up another piece of their cap structure.  As a holder of the preferred stock I would love an offer like that - the company might say its dilutive...but what are they diluting - there are no earnings right now - and as soon as earnings start coming they will have to start paying the pref dividend again - so cash out the door.  If I was the CFO or a board member I would offer the preferred holders a swap - and put this issue to bed.