S&P cuts Meritage outlook to negative

Standard & Poor's said it revised its outlook on Meritage Homes Corp. to negative from stable.

Concurrently, the agency said it affirmed its BB corporate credit and senior unsecured debt ratings and our B+ senior subordinated debt rating.

"The outlook revision reflects Meritage's continued exposure to highly competitive homebuilding markets and static debt levels that have placed pressure on the company's financial profile," said credit analyst Tom Taillon.

"While Meritage should have an adequate cushion above existing financial covenants, further market deterioration could adversely affect its ability to generate free cash flow for debt reductions and maintain sufficient liquidity. Adequate current liquidity and the lack of near-term maturities are factors that continue to support the credit rating at this time."

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