Moody's ups McMillin implied rating

Moody's Investors Service said it raised the senior implied rating of McMillin Cos. LLC to B1 from B2 and confirmed the company's existing B2 rating on its $70 million senior secured notes due 2009 and B3 unsecured issuer rating.

The outlook is stable.

Moody's said the upgrade to the senior implied rating acknowledges the improvement in the company's financial ratio performance, both with and without a pro forma consolidation of its very profitable off-balance sheet joint venture operations. The ratings also acknowledge the company's 44-year history, its strong brand name recognition, the growth in its equity base and on-balance sheet assets, and its long-standing relationships with suppliers, subcontractors, and governmental agencies.

The ratings also consider McMillin's geographic concentration, the increased competition in its markets from the large national builders, its small size compared to its rated competition, its LLC and holding company structure, the proportion of secured construction debt in the capital structure, and the company's dependence on earnings from residential land, commercial and other real estate ventures which are perceived to have greater risks than the homebuilding operations.

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