Fitch Downgrades Several Home Builders
Fitch Downgrades Several Home Builders
Fitch Ratings recently downgraded its ratings on several publicly traded homebuilders, as the new-home market continues to weather one of its worst sales years on record.
Fitch downgraded KB Home to B+ from BB-, citing the company’s over-exposure to the credit-challenged entry-level market as well as the high probability that it’s liquidity position is likely to erode in the next 12-18 months if it continues to have operating losses, HousingWire reports.
Fitch also downgraded the issuer default rating for Beazer Homes USA Inc. to CCC from B-. IDR at Ryland Group Inc. also was downgraded from a stable rating to negative, to BB- from BB.
Meanwhile, Toll Bros., a luxury home builder, held onto its stable outlook, according to Fitch’s latest report.
"With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may at best support a relatively modest recovery in housing metrics over the next year and a half," Fitch said in a statement on Monday. Previously, Fitch had forecast a pick-up in the housing market in 2011 and 2012.
Source: “Fitch Downgrades Homebuilders as Housing Market Softens,” HousingWire (Sept. 12, 2011)
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