Fitch rates Meritage notes BB-

Fitch Ratings said it assigned a BB- with a recovery rating of RR3 rating to Meritage Homes Corp.'s proposed offering of $150 million principal amount of senior unsecured notes due 2018.

This issue will be rated on a pari passu basis with all other senior unsecured debt.

The proceeds will be used to repurchase or redeem all of the company's existing 7.731% senior subordinated notes due 2017 and for general corporate purposes, Fitch said.

The company has a long-term issuer default rating of B+, senior unsecured debt rating of BB- with a recovery rating of RR3 and senior subordinated debt rating of B- with a recovery rating of RR6.

The outlook is stable.

The ratings are influenced by the company's execution of its business model, conservative land policies, geographic and product line diversity, acquisitive orientation, healthy liquidity position and the improving industry outlook for 2013 and 2014, Fitch said.

The company's sales are reasonably dispersed among its 15 metropolitan markets within seven states, the agency said.

Fitch's housing forecasts for 2013 assume a modest rise off a very low bottom.

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