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S&P lifts KB Home view to positive
S&P said it revised the outlook on KB Home to positive from stable and affirmed its BB- issuer credit rating, along with the BB- rating on its senior unsecured notes.
The recovery rating on the notes remains at 3.
The outlook revision primarily reflects the company's strongly improved financial metrics, which now appear to be moderating from these relatively firm levels, S&P explained.
Even though the agency said it anticipates that further revenue increases and margin gains will be harder won due to slowing broader demand and affordability issues, there remains ample scope for continued improvement in KB's credit profile, the agency said.
S&P said it thinks management is committed to using its solid discretionary cash flows toward continued debt reduction.
If the company is able to maintain leverage of less than 3x or below, S&P said it expects to raise the rating on KB Home to BB.
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