Moody's: D.R. Horton at SGL-1

Moody's Investors Service said it upgraded the speculative grade liquidity rating of D.R. Horton to SGL-1 from SGL-2.

Moody's said the SGL-1 rating indicates very good liquidity for the next 12 months, reflecting Horton's comfortable current cash balances, large bank credit facility, ample headroom under its financial covenants and Moody's expectation that the company will be modestly free cash flow positive over the coming 12-month measurement period.

Going forward, the SGL-1 rating could be stressed if the company were to change its owned/optioned lot mix again, back in favor of ownership or if it were to bulk up in its work-in-process inventory significantly in excess of its new order rate, Moody's said.

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