S&P rates M/I Homes preferreds B

Standard & Poor's said it assigned its B rating to a $100 million 9.75% preferred stock offering by M/I Homes Inc.

The rating on this new issuance does not affect the existing BB corporate credit rating on M/I Homes or S&P's negative outlook.

Proceeds from the offering are expected to be used to reduce borrowings under the company's revolving credit agreement, the agency said, noting that it views this preferred stock as a costly capital source in relation to the company's average cost of debt, however, the security does receive partial equity consideration.

Although this transaction will enhance near-term liquidity and create room under the company's credit facility interest coverage covenant, the agency said it maintain its negative outlook because we expect market conditions to remain challenging and to pressure already weakened cash flow.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.