S&P rates AV Homes notes B-

Standard & Poor’s said it assigned a B- corporate credit rating to AV Homes, Inc.

The agency also said it assigned a B- rating and 3 recovery rating to the company’s proposed $200 million of senior unsecured notes. The 3 recovery rating indicates 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect the builder’s vulnerable business risk profile characterized by a small, geographically concentrated operating platform and lack of sustained profitability to date, S&P said.

The agency said it views the financial risk profile as highly leveraged given projected cash flow-based credit metrics that will remain very weak over the next two years.

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