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S&P lowers Hovnanian
S&P said it lowered the corporate credit rating on Hovnanian Enterprises Inc. to CCC+ from B-.
The agency also said it lowered the ratings on the company's 7¼% first-lien senior secured notes due 2020 to CCC+ from B-. The 3 recovery rating is unchanged, indicating 50% to 70% expected default recovery.
The agency also said it lowered the ratings on the company's 5% and 2% first-lien senior secured notes due 2021 to CCC from CCC+. The 5 recovery rating is unchanged, indicating 10% to 30% expected default recovery.
S&P also said it lowered the ratings on the company's 9 1/8% second-lien senior secured notes due 2020 and senior unsecured notes due 2016 through 2019 to CCC- from CCC.
The 6 recovery rating is unchanged, indicating 0 to 10% expected default recovery.
The rating on the preferred stock remains at C because covenants on the public bonds restrict the company from paying a dividend.
The outlook is negative.
The negative outlook reflects the potential for a downgrade over the next 12 months if it appears Hovnanian will experience difficulty or delays in raising capital through land-banking arrangements, joint ventures or other transactions in amounts sufficient to meet upcoming debt maturities, S&P said.
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