Moody's ups Meritage CFR, notes, convertibles

Moody's Investors Service said it raised the corporate family rating of Meritage Homes Corp. to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD.

Concurrently, the agency upgraded all of the company's existing senior unsecured notes and convertible senior notes due 2032 to Ba3 from B1.

The speculative-grade liquidity assessment was affirmed at SGL-2 and the outlook is stable.

The upgrade of the corporate family rating to Ba3 reflects the expectation for continued improvement in Meritage's credit metrics. Moody's projects adjusted homebuilding debt leverage to be maintained below 50% and gross margins are projected to be at least 22% resulting in continued positive net income generation.

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