Fitch rates KB Home notes BB+

Fitch Ratings said it assigned a BB+ rating to KB Home's $300 million of 6.25% senior unsecured notes due June 15, 2015.

The outlook is positive.

Proceeds from the new debt issue will be largely used to pay down bank debt and for other corporate purposes.

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 agency said risk factors include the cyclical nature of the homebuilding industry. Fitch expects leverage, excluding financial services, to remain comfortably within KB Home's stated debt-to-capital target of 45% to 55%.

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