Moody's rates Taylor Morrison notes B2

Moody's Investors Service said it assigned a B2 (LGD 4, 67%) rating to Taylor Morrison Communities, Inc.'s proposed $500 million senior unsecured notes due 2021.

The proceeds will be used for growth capital and general corporate purposes, including land acquisition and development.

Moody's said it affirmed the ratings of Taylor Morrison and of its Canadian co-issuer, Monarch Communities Inc., including the B1 corporate family rating, B1-PD probability of default rating and B2 rating on the existing $675 million 7¾% senior unsecured notes due 2020.

The outlook was revised to positive from stable.

The outlook revision acknowledges that the company achieved certain benchmarks that are considered upgrade triggers, Moody's said.

The company also made a good first move toward resolving its ultimate ownership, given its recent initial public stock offering, the agency said.

The ratings reflect the company's track record of profitability and solid gross margin performance, moderate adjusted homebuilding debt leverage, geographic diversity and a land position that appears to be realistically valued, Moody's said.

The ratings also consider the company's limited time as an independent, stand-alone entity and the short tenure of its top financial management, the agency said.

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