Moody's: Kimball Hill view stable

Moody's Investors Service said it changed Kimball Hill, Inc.'s outlook to stable from positive and affirmed the company's B1 corporate family and probability-of-default ratings and the B3 $203 million senior subordinated notes due 2012 (LGD5, 90%).

The change in outlook reflects Moody's concern that Kimball Hill's remaining in compliance with financial covenants, particularly the interest coverage covenant, will be a challenge in fiscal 2007 and that a difficult overall market for housing would tend to rule out any upgrades in the near-to-intermediate term.

The now stable ratings outlook reflects Moody's expectations that Kimball Hill will comply with its financial covenants with some room to spare, will maintain debt leverage at or below 55% and will be cash flow positive in fiscal 2007.

The agency said the ratings recognize Kimball Hill's relatively smaller size and scale than the typical homebuilder in the Ba category, proportion of speculative building and the cyclical nature of the homebuilding industry. At the same time, the ratings acknowledge the significant strides that the company has made in reducing debt leverage.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.