Moody's rates McMillin notes B2

Moody's Investors Service said it assigned a B2 rating to McMillin Cos. LLC's $100 million senior secured notes and affirmed the company's B1 corporate family rating. The outlook is stable.

The notes, which were privately placed last year, were used to refinance a previous $70 million issue of senior secured notes and to pay down some senior secured bank debt.

Moody's said the ratings reflect McMillin's geographic concentration, the increased competition in its markets from the large national homebuilders, its complex LLC and holding company structure combined with numerous off-balance sheet ventures, the proportion of secured construction debt in its capital structure that is senior to the secured notes being rated herein 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.

At the same time, the ratings acknowledge the improvement in the company's financial ratio performance, the steady growth in the company's equity base and on-balance sheet assets, its 45-year history, its strong brand name recognition and its long-standing relationships with suppliers, subcontractors and governmental agencies, the agency said.

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