S&P rates Ryland Group notes BB-

Standard & Poor's said it assigned a BB- rating and 4 recovery rating to the Ryland Group Inc.'s $300 million 6 5/8% senior unsecured note offering due May 2020.

All of Ryland's homebuilding subsidiaries jointly guarantee the note offering. The 4 recovery rating indicates an expectation for a 30% to 50% recovery in the event of a default.

Ryland's newly issued notes will rank equally with the company's existing unsecured and unsubordinated debt, the agency said.

Ryland's fourth-quarter home closings were up 75% year-over-year on 34% fewer communities, S&P said. Gross and operating margins also improved and inventory turnover climbed to 1.5x, the agency said.

However, the agency said it believes a return to consistent profitability could be challenging this year.

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