S&P downgrades credit rating of Beazer Homes

Standard and Poor’s has downgraded the credit rating of Atlanta-based Beazer Homes USA. A research update published by the agency says the company’s rating is being lowered from “ ‘CCC’ from ‘CCC+’ and our issue-level rating on the company’s notes to ‘CCC-’ from ‘CCC’.” The report also says S&P expects “Beazer’s sales and profitability will remain weak through the balance of 2009.”

One of the reasons for the downgrade was “a large second-quarter net loss that further eroded shareholder equity, raised the company’s already-high leverage ratios, and increased covenant pressures,” the report said.

The credit rating company also said it acknowledged Beazer “has made good progress toward resolving several outstanding legal issues. However, a sharp reduction in shareholders’ equity and tangible net worth outweighed these positive factors.”

- Michelle E. Shaw