Fitch rates Meritage Homes note B+

Fitch Ratings said it assigned a B+ rating to Meritage Homes Corp.'s $150 million 7.73% senior subordinated notes due April 30, 2017 and affirmed the company's BB issuer default and senior unsecured ratings.

The outlook is stable.

The company used the net proceeds of $147.2 million from the private placement to pay down borrowings under its revolving credit facility.

The agency said the ratings for Meritage are based on the company's successful execution of its business model, conservative land policies, geographic and product line diversity and management's exhibited ability to quickly and successfully integrate its acquisitions.

Risk factors include the inherent cyclicality of the homebuilding industry, the company's aggressive growth strategy and Meritage's capitalization and size, Fitch said.

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