A federal judge allowed indebted homebuilder Hovnanian Enterprises Inc. to complete a disputed financing deal with Blackstone Group’s lending platform that has riveted credit derivatives market participants, WSJ Pro Bankruptcy reported. U.S. District Judge Laura Taylor Swain said on Monday that she wouldn’t stop Hovnanian from refinancing its debts at favorable rates under a transaction designed to send credit default swap payments to the lender, Blackstone’s GSO Capital Partners LP. The ruling marks a defeat for Solus Alternative Asset Management LP, which stands to take a loss if derivative contracts held by GSO are tripped. Solus had asked the judge to put a temporary hold on the deal pending the outcome of a fraud and manipulation lawsuit unfolding in New York federal court. The judge’s decision paves the way for an unorthodox transaction that has sparked debate about the viability of modern credit protection markets and ensnared investors on opposite sides of nine-figure swap bets.