S&P ups, rates Adams Homes notes BB-

S&P said it raised its ratings for Adams Homes Inc. to B+ from B and its senior unsecured debt to BB- from B+. The 2 recovery rating on the debt is unchanged. The agency also assigned BB- and 2 recovery ratings to Adams’ planned $250 million in senior unsecured notes due 2028.

Adams Homes Inc. wants to fund a partial tender of its outstanding notes and repay its revolver with proceeds from the new notes.

“We expect adjusted debt leverage pro forma for the transaction to be about 2.2x before declining toward the 1.5x area through 2024, driven by increases in closings and average selling prices and despite a decline in gross margins,” S&P said in a press release.

The outlook is stable.

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