Moody's upgrades Lennar

Moody's Investors Service said it raised Lennar Corp.'s senior subordinated convertibles notes to Ba1 from Ba2 and senior notes to Baa2 from Baa3 and assigned a Prime-2 short-term debt rating to the company's planned $2 billion commercial paper program. The outlook is stable.

The upgrade acknowledges Lennar's long and consistent history of strong revenue and earnings growth; healthy liquidity; a successful track record of integrating numerous acquisitions; considerable geographical, price point and product line diversification; large equity base; and significant management ownership, the agency said.

At the same time, Moody's said the ratings consider the financial and integration risks that accompany Lennar's active acquisition policy, its ongoing share repurchase program, the fact that the company makes more extensive use of off-balance sheet structures when acquiring home sites than most of its peers and its larger-than-industry-average lot position.

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