Beazer Homes Inc. (BZH)

[Wildbilly]

S&P Revises Beazer's Rating Outlook to Stable
on Better Operating Performance


   By Debbie Cai

  Standard & Poor's Ratings Services revised its rating outlook on Beazer Homes USA Inc. (BZH) to stable from negative, citing improved operating performance at the homebuilder.
  The firm backed Beazer's corporate credit rating at B-minus, which is six steps into junk territory.
  Beazer's stronger-than-anticipated results were driven by year-over-year growth in deliveries, average sales price, and margin expansion, S&P said. Current ratings acknowledge the company's highly leveraged balance sheet and the need for further operational improvement, offset by adequate liquidity and the lack of near-term debt maturities, according to the ratings firm.
  S&P said the ratings are reflective of Beazer's "highly leveraged" financial risk profile, as measured by a heavy debt load and sizable interest obligations. However, the company has had success in pushing scheduled debt maturities to 2016 and beyond and boosting its liquidity position.
  Beazer's business risk profile is assessed at "vulnerable," due to the considerable operating improvements necessary to reach profitability and its larger presence in relatively weaker Southeast, Northeast, and Midwest markets, the firm said.
  S&P anticipates the company will continue to strengthen its earnings before interest, taxes and depreciation as the housing recovery.
  Earlier this month, Beazer reported its fiscal second-quarter loss narrowed as revenue jumped and it continued to see improvements in home closings, backlogs and margins.
  Shares rose 11 cents to $21.95 recently. The stock is up 63% over the past 12 months.

  Write to Debbie Cai at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

  (END) Dow Jones Newswires
  May 15, 2013 12:47 ET (16:47 GMT)
  Copyright (c) 2013 Dow Jones & Company, Inc.- - 12 47 PM EDT 05-15-13
Source: DJ Broad Tape