Moody's lowers Centex

Moody's Investors Service said it lowered Centex Corp.'s corporate family and probability-of-default ratings to Ba2 from Ba1 and its senior unsecured notes to Ba2 (LGD4, 53%) from Ba1 (LGD4, 54%). The agency assigned a speculative grade liquidity rating of SGL-2.

The outlook remains negative.

According to Moody's, the downgrade reflects homebuilding cash flow that is still running behind expectations despite the company's success in reducing inventories in its fiscal year that ended March 31.

The downgrade also reflects quarterly losses even before charges and materially larger losses when charges are included, the agency said.

Ratings are supported by its strong inventory performance, sharply reduced land supply, growing cash position and a recent new order performance that is relatively stronger than its former Ba1 peers, Moody's noted.

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