S&P rates Mattamy notes BB

S&P said it assigned a BB rating and 3 recovery rating to Mattamy Group Corp.'s proposed issuance of $300 million senior unsecured notes due 2023.

The 3 recovery rating on the notes indicates 50% to 70% expected default recovery.

The agency also said it affirmed the corporate credit rating of BB on the company.

The outlook is stable.

The proceeds will be used to pay down revolving debt, S&P said, so the transaction is viewed as effectively debt-for-debt.

Mattamy is the largest single-family homebuilder in Canada and is expanding its new home footprint in the United States, also operating to a smaller extent as a land developer for both internal use and sale to third parties on both sides of the border, the agency said.

The stable outlook reflects an expectation for substantial home closing growth during Mattamy's fiscal 2017, pushing EBITDA higher and stimulating cash flow generation, S&P said.

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