Moody's: Ryland convertibles B1

Moody's Investors Service said it assigned a B1 (LGD4, 52%) rating to the proposed $250 million convertible senior notes due 2019 of Ryland Group, Inc. and affirmed the company's B1 corporate family rating and B1-PD probability of default ratings, the B1 (LGD4, 52) rating for its existing senior notes and convertible senior notes and SGL-2 speculative grade liquidity rating. The outlook is stable.

The proceeds of the convertibles will be designated for general corporate uses such as potential land investments or debt retirement.

The agency said the B1 corporate family rating reflects its expectation that Ryland's key credit metrics will continue improving over the next 12 to 18 months, supported by the rising new orders, closings and revenues as well as by improvement in average selling prices in certain key markets.

Despite this improvement, key credit metrics will remain weak for the rating in the intermediate term, Moody's believes, as it will take time to generate substantial improvement off a low base.

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