Fitch cuts Pulte Homes to BBB

Fitch Ratings said it downgraded Pulte Homes, Inc.'s issuer default rating to BBB from BBB+, senior unsecured rating to BBB from BBB+ and unsecured bank credit facility to BBB from BBB+.

The actions affect about $3.48 billion in outstanding senior notes and the company's $1.86 billion unsecured revolving credit facility, of which $173 million was outstanding at June 30.

The outlook is negative.

The downgrade reflects the continued difficult U.S. housing environment, negative trends in operating margins and current deterioration in credit metrics, Fitch said.

The negative outlook reflects the challenging outlook for the homebuilders, current and expected near-term deterioration in credit metrics, pressures from mortgage credit tightening and continued high cancellation rates, which add to speculative inventory totals, the agency said.

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