Moody's rates Rhodes loans Ba3, B1

Moody's Investors Service said it assigned ratings to The Rhodes Cos. LLC, including a B1 corporate family rating, a Ba3 rating on the proposed $450 million five-year senior secured first-lien term loan and a B1 rating on the proposed $150 million six-year senior secured second-lien term loan.

The outlook is stable.

Moody's said the ratings reflect the company's aggressive pro forma adjusted debt leverage (as measured by adjusted debt/capitalization and adjusted debt/EBITDA), relatively small size and scale, limited geographic reach and product diversity, some prior indications of speculative excess in the Las Vegas housing market, and the cyclical nature of the homebuilding and land development industries.

At the same time, the ratings recognize the significant collateral in the structure (as represented by the Cushman & Wakefield asset appraisal of $1.6 billion), the ongoing strength of the Las Vegas housing market, the company's reasonably strong historical track record, and the considerable infrastructure spending completed to date in the Rhodes Homes master planned communities, the agency said.

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