Moody's downgrades Centex

Moody's Investors Service said it downgraded Centex Corp.'s corporate family and probability-of-default ratings to Ba3 from Ba2, senior notes rating to Ba3 from Ba2 and its speculative grade liquidity rating to SGL-3 from SGL-2.

The outlook remains negative.

Moody's said the downgrades reflect impairments and option abandonment charges, shrinking headroom under Centex's debt leverage and tangible net worth covenants, continued quarterly losses before impairments and option abandonment charges, high debt leverage and the crisis in the U.S. financial system.

Ratings also acknowledge reduced inventory, cash flow generation and falling exposure to joint venture obligations, the agency said.

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