Moody's affirms Kaufman & Broad

Moody's Investors Service said it affirmed the Ba3 senior implied and unsecured issuer ratings and the B1 rating of the senior notes due 2009 of Kaufman & Broad SA.

The rating action followed Kaufman & Broad's announcement that it has agreed to pay €85 million as a prepayment of future royalties due under its agreement with its parent company KB Home. The outlook on all ratings is stable.

Moody's said the rating affirmations reflect its view that although Kaufman & Broad's net debt will rise significantly as a result of the prepayment, the company nevertheless retains adequate financial flexibility within its leverage targets to accommodate this.

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