A downgrade of Beazer Homes' bond rating Wednesday doesn't mean the Atlanta-based company is near collapse, but it does say concerns about its viability persist.

Moody's Investor Service dropped Beazer's debt rating to "B2" from "B1," citing worries about lawsuits, investigations, murky finances and the generally poor state of the national housing market.

Moody's calls B2 "speculative"; the market calls it "junk."

"B2 doesn't suggest the end is near," Moody's analyst Joe Snider said in an interview. "It means there are a lot of legitimate concerns."

In 2006, Beazer was the nation's seventh-biggest home builder. Since then, the company has downsized after homeowner defaults in the Charlotte area came to light, triggering investigations. Beazer has admitted that employees violated federal lending regulations.

The company's business and stock price have plunged. As a result, Beazer cut its work force in half, quit making loans and pulled out of five housing markets, including Charlotte, the only metro area where home prices have gone up since early 2007, according to the S&P/Chase-Shiller index released Tuesday. It still does business in 19 states.

Beazer is recalculating its earnings for the past several years to correct inaccuracies. That information is due no later than May 15.

The company's stock closed Wednesday at $8.75, down $1.40. One year ago today, shares were $31.41.

Beazer Executive Vice President and Chief Financial Officer Allan Merrill said at a meeting with analysts Wednesday he knew of no new developments within the company that might have triggered the ratings change. The analyst meeting was unrelated to the Moody's announcement.

"That probably reflects more an industry perspective than specific items" about Beazer, Merrill said about the downgrade.

He said consumer confidence data released this week indicate the public's optimism is at a 35-year low, so the home-buying slump may have a ways to go.

"The lack of consumer confidence is very, very significant in our business," Merrill said. "We do expect this to be a very, very tough year."

Moody's said it does not anticipate a housing market upturn "before 2010 at the earliest."

The service has downgraded most of the home builders it tracks. As for Beazer, "the ratings remain on review for possible further downgrade," Moody's said.

Vicki Bryan, senior analyst with Gimme Credit, an independent bond research shop, said dropping Beazer to "B2" from "B1" — both junk ratings — is practically meaningless because the reasons that were cited are old news.

"The outlook for housing is deteriorating — yes, we all know that," Bryan said.

Chip MacDonald, a partner in the capital markets group at the Jones Day law firm, said the rating change could make it costlier for Beazer to raise money. Lower-rated debt generally carries a higher interest rate.

But the downgrade, MacDonald added, "is not surprising. You can't escape your industry, or the economy your industry is in. They are what they are."