S&P lowers Pulte

Standard & Poor's said it lowered its corporate credit rating on PulteGroup Inc. to BB- from BB with the expectation that profitability will remain weak through 2011.

At the same time, the agency said it also lowered its rating on roughly $4.3 billion of senior unsecured notes, including those issued by Centex Corp., which PulteGroup acquired in August 2009, to BB- from BB.

The agency added that its 4 recovery rating on the notes is unchanged and continues to reflect its expectation for an average recovery in the event of default.

S&P revised its outlook on the company to stable from negative.

"Our rating on PulteGroup reflects an aggressive financial profile marked by sustained operating losses and very weak EBITDA-based credit metrics," said credit analyst James Fielding.

"We do not expect PulteGroup to report substantial profits in the second half of 2010 or in 2011 because the housing market is recovering more slowly than we had previously anticipated."

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