S&P cuts KB Home to negative

Standard & Poor's said it revised the outlook on KB Home to negative from stable and affirmed the B+ corporate credit rating and B+ rating on roughly $1.6 billion of senior notes. The recovery rating is unchanged at 4.

The outlook revision to negative reflects the risk that the cash settlement, a pending maturity and working capital needs could constrain the homebuilder's financial flexibility, the agency said.

The ratings on KB Home reflect large accumulated losses in recent years that eroded shareholder equity and contributed to the homebuilder's t highly leveraged financial profile, the agency added.

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