Fitch rates KB Home 5.75% notes BB+

Fitch Ratings said it has assigned a BB+ rating to KB Home's $250 million 5.75% senior unsecured notes due Feb. 1, 2014.

The outlook is positive.

Fitch said proceeds from the new debt issue will be largely used to pay down bank debt in the short term and for other corporate purposes. $175 million of 7¾% senior notes will mature later in the year.

Fitch said the current ratings and outlook reflect KB Home's solid, consistent profit performance in recent years and the expectation that the company's credit profile will continue to improve as it executes its business model and embarks on a new period of growth.

The ratings also take into account the company's primary focus on entry-level and first-step trade-up housing (the deepest segments of the market), its conservative building practices, and effective use of return on invested capital criteria as a key element of its operating model.

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