Moody's cuts Ryland

Moody's Investors Service said it downgraded the ratings of Ryland Group, Inc., including its corporate family, probability of default and senior debt ratings to B1 from Ba3. The speculative-grade liquidity rating was affirmed at SGL-2.

The outlook is stable.

The downgrade reflects the expectation that the company's substandard credit metrics, elevated debt leverage, negative earnings and cash flow generation, and weak margins, will take longer than previously expected to return to levels compatible with its former Ba3 rating, the agency said.

The ratings consider the belief that Ryland will continue to generate negative earnings and cash flow into 2012, key credit metrics will remain weak for the rating category for the intermediate term and end markets will continue distressed into 2012, the agency added.

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