Moody's: Meritage Homes up to positive, notes rated Ba3

Moody's Investors Service said it assigned a Ba3 rating to the new $300 million issue of senior unsecured notes of Meritage Homes Corp. and confirmed the company's Ba3 senior implied rating, Ba3 rating on the existing issue of senior unsecured notes and the B1 issuer rating. The outlook was changed to positive from stable.

The positive ratings outlook reflects Moody's expectation that the company will continue to deleverage its balance sheet and maintain above-average returns while pursuing its expansion opportunities.

Moody's said the ratings incorporate the financial and integration risks associated with an acquisition-based growth strategy, modest size and lack of geographic diversification compared to its peer group, heavy reliance on options in general as well as on land banking options in particular and dual corporate structure in Arizona and Texas.

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