S&P rates Shea Homes notes B

Standard & Poor's said it assigned a B corporate credit rating to Shea Homes LP and its subsidiary Shea Homes Funding Corp. and a B issue-level rating to the company's proposed $750 million of senior secured notes due May 2019. S&P also assigned a 4 recovery rating to the senior secured notes, indicating expectation for an average (30%-50%) recovery.

The outlook is positive.

The ratings on Shea reflect the company's aggressive financial profile, marked by low interest coverage metrics, high debt leverage and modest cash reserves compared with other builders, S&P said.

The ratings consider Shea's weak business profile given low sales and limited pricing power that contribute to ongoing impairment charges and very weak profitability, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.