S&P Lowers Beazer Homes (BZH) Credit to 'Selective Default'

August 18, 2009 5:20 PM EDT
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Standard & Poor's Ratings Services lowered its corporate credit rating on Beazer Homes USA Inc. (NYSE: BZH) to 'SD' (selective default) from 'CCC', reflecting what the firm views to be a de facto restructuring of some of the company's unsecured debt during its most recent fiscal quarter.

Standard & Poor's credit analyst James Fielding said, "Our rating actions follow the company's announcement that it had repurchased $116 million of its unsecured notes during its third fiscal quarter ended June 30, 2009... In our opinion, these repurchases constituted a distressed restructuring given the steep discount and the significant relative size of transactions"

Beazer Homes bought the notes at a roughly 50% discount to their face value, and the amounts repurchased equated to approximately 8% of the previously outstanding aggregate balance.

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