S&P revises Ashton Woods view to positive

S&P said it revised its outlook on Ashton Woods USA LLC to positive from stable and affirmed its B- issuer credit rating on the company.

At the same time, S&P affirmed its B- issue-level rating on the company's senior unsecured notes and revised the recovery rating to 4 from 3. The 4 recovery rating indicates an expectation for average recovery (30%-50%; rounded estimate: 40%).

S&P said it revised the recovery rating after reviewing Ashton's asset base and related liabilities.

“The positive outlook reflects our expectation that most of Ashton Woods' key financial measures should improve due to faster sales and more modest inventory requirements associated with the company's renewed entry-level emphasis,” S&P said in a news release.

“However, we note that there are risks inherent in its rapid segment downshift even as its ongoing profitability remains inferior to that of most of its public peers.”

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