S&P affirms Kimball Hill

Standard & Poor's said it affirmed its BB- corporate credit rating on Kimball Hill Inc. and its B rating on the company's senior subordinated debt.

The outlook is stable.

The agency added that the ratings reflect Kimball Hill's long and conservative operating history and a recent equity offering that deleveraged the company's balance sheet and improved liquidity, as management anticipates continued weak industry-wide demand well into the coming year.

Credit concerns include a growing level of speculative inventory, which has been exacerbated by a recent spike in cancellation rates and weak debt coverage measures, as profitability has declined due to higher incentives, rising costs, inventory impairments and lot option write-downs, the agency said.

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