Moody's lifts D.R. Horton

Moody's Investors Service said it upgraded D.R. Horton, Inc.'s corporate family and probability of default ratings to Ba2 from Ba3, along with the ratings on the company's existing senior unsecured notes and convertible senior notes to Ba2 (LGD 4, 54%) from Ba3 (LGD 4, 54%).

The speculative grade liquidity assessment is SGL-2.

The outlook is stable.

The upgrades reflect an expectation that Horton will be able to translate the slowly improving trends in the homebuilding industry into stronger credit metrics, including expanding gross margins and return on assets, Moody's said.

Despite the industry headwinds, the company generated positive net income during seven of the last nine quarters while reducing its adjusted debt leverage to 39% from 58%, the agency said.

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