Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings.

The agency said this methodology will enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and also express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

Homebuilding and construction

Ashton Woods USA, LLC, B1; probability-of-default rating, B1; notes, B3 LGD 5, 87%.

Beazer Homes USA, Inc., Ba1; probability-of-default rating, Ba1; notes, Ba1, LGD 4, 53%; convertible notes, Ba1, LGD 4, 53%; 2.

Champion Enterprises, Inc., B1; probability-of-default rating, B1; notes, upgraded to B1 from B2, LGD4, 54%. Champion Home Builders, Co., loans, B1, LGD4, 54%.

Dycom Industries, Inc., Ba2; probability-of-default rating, Ba2. Dycom Investments, Inc., notes, Ba3, LGD 5, 80%.

Emcor Group, Inc., Ba1; probability-of-default rating, Ba1.

Foster Wheeler LLC, B1; probability-of-default rating, B1; revolver, upgraded to Ba1 from Ba3, LGD 1, 5%.

Ginn-LA CS Holding Company, LLC, B2; probability-of-default rating, B2; first-lien loans, B1, LGD 3, 40%; second-lien loan, downgraded to Caa1 from B2, LGD 6, 91%.

Hovnanian Enterprises, Inc., Ba1; probability-of-default rating, Ba1; notes and preferred stock Ba1, LGD 6, 96%.

KB Home, Ba1; probability-of-default rating, Ba1; senior notes, Ba1, LGD 3, 49%; senior subordinated ntoes, Ba2, LGD 6, 92%.

Kimball Hill, Inc. , B1; probability-of-default rating, B1; notes, B3, LGD 5, 90%.

Lake at Las Vegas Joint Venture, B2; probability-of-default rating, B3; term loan, B2, LGD 3, 36%.

LBREP/L Suncal Master I, LLC, B2; probability-of-default rating, B2; first-lien loans, B1, LGD 3, 35%; second-lien loan, downgraded to Caa1 from B2, LGD 5, 88%.

M/I Homes, Inc., Ba2; probability-of-default rating, Ba2; notes, Ba2, LGD 4, 56%.

Mactec, Inc., B2; probability-of-default rating, B3; loans, upgraded to Ba3 from B1, LGD 2, 22%.

MasTec, Inc., Ba3 probability-of-default rating, Ba3, notes, B2, LGD 5, 84%.

McMillin Cos., LLC, B1; probability-of-default rating, B1; notes, B2, LGD 5, 74%.

Meritage Homes Corp., Ba2; probability-of-default rating, Ba2; notes, Ba2, LGD 4, 58%.

November 2005 Land Investors, LLC, B2; probability-of-default rating, B2; first-lien loans, B1, LGD 3, 40%; second-lien loan, downgraded to Caa1 from B2, LGD 6, 91%.

Palmdale Hills Property, LLC, B2; probability-of-default rating, B2; first-lien loans, B1, LGD 3, 36%; second-lien loans, downgraded to Caa1 from B2, LGD 5, 89%.

The Rhodes Cos., LLC, B1; probability-of-default rating, B1; first-lien loans, downgraded to B1 from Ba3, LGD 3, 44%; second-lien loans, downgraded to B3 from B1, LGD 6, 93%.

The Shaw Group, Inc., Ba2; probability-of-default rating, Ba2; revolver, Ba2, LGD 3, 42%.

Standard Pacific Corp., Ba2; probability-of-default rating, Ba2; senior notes, Ba2, LGD 3, 49%; senior subordinated ntoes, downgraded to B1 from Ba3, LGD 6, 95%.

Stanley-Martin Communities, LLC, B1; probability-of-default rating, B1; notes, B3, LGD 5, 76%.

Technical Olympic USA, Inc., Ba3; probability-of-default rating, Ba3; senior notes, upgraded to Ba2 from Ba3, LGD 3, 35%; senior subordinated notes, B2, LGD 5, 87%.

United Subcontractors Inc., B2; probability-of-default rating, B2; first-lien loans, upgraded to Ba3 from B2, LGD3, 31%; second-lien loan, Caa1, LGD5, 84%.

WCI Communities, Inc., Ba2; probability-of-default rating, Ba2; senior subordinated notes and senior subordinated convertible notes, Ba3, LGD 5, 81%.

William Lyon Homes, B1; probability-of-default rating, B1; notes, downgraded to B3 from B2, LGD 5, 79%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.