S&P lifts D.R. Horton senior notes from junk

Standard & Poor's said it raised its corporate credit rating on D.R. Horton Inc. to BBB- from BB+, its $3.1 billion of senior unsecured notes to BBB- from BB+ and its $300 million of subordinated debt to BB+ from BB-. The outlook was revised to stable from positive.

S&P said the upgrade acknowledges Horton's maintenance of a moderate and comparatively transparent financial profile, a broad geographic and product platform that provides good stability to operating earnings and a demonstrated commitment to an internal growth strategy.

Horton's above-average profit margins would provide some cushion if the company needed to lower prices to move product, which the agency said mitigates the risk of inventory buildup associated with the company's speculative business model.

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