Moody's rates Horton notes Ba3

Moody's Investors Service said it assigned a Ba3 rating to the $450 million of convertible senior notes of D.R. Horton, Inc. and affirmed its corporate family rating at Ba3, probability-of-default rating at Ba3, senior notes rating at Ba3 (LGD4, 53%) and subordinated debt rating at B2 (LGD6, 97%).

The speculative grade liquidity rating was revised to SGL-2 from SGL-3.

The outlook was changed to stable from negative.

Moody's said the change in outlook reflects the company's large cash position, positive cash flow generation and absence of any covenant compliance pressures.

The Ba3 rating balances the company's large cash position, leading scale and cash generation track record against expectation that Horton's future cash flow generation will fall from its currently robust levels, and its long land position will prolong the likelihood of its taking additional impairment charges, the agency said.

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