Fitch downgrades Ryland

Fitch Ratings said it downgraded Ryland Group, Inc.'s issuer default rating to BB- from BB and senior unsecured debt to BB- from BB.

The outlook was revised to negative from stable.

The downgrade reflects the still challenging U.S. housing market, which is likely bouncing on the bottom, following a massive cyclical correction, Fitch said.

With the recent softening in the economy and lowered economic growth expectations for 2011 and 2012, the environment may only support a relatively modest recovery in housing metrics over the next year and a half, the agency said.

The negative outlook reflects the company's underperformance relative to its peers in certain operational and financial categories during recent quarters and its slimming cash position, Fitch said.

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