Moody's downgrades KB Home

Moody's Investors Service said it downgraded KB Home's corporate family rating, probability of default rating and senior unsecured note rating to B2 from B1.

The agency also said it affirmed its SGL-2 speculative-grade liquidity rating.

The outlook is stable.

The downgrade reflects the company's elevated leverage, negative earnings and negative cash flow generation, Moody's said.

The rating reflects an expectation that KB Home will continue to generate negative earnings and cash flows, the agency said.

The ratings are supported by its solid unrestricted cash position of $736 million at the end of February, Moody's said, along with its lack of financial maintenance covenants and lack of meaningful debt maturities in the near term.

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