Fitch cuts M/I Homes

Fitch Ratings said it downgraded M/I Homes, Inc.'s issuer default rating to B+ from BB- and series A non-cumulative perpetual preferred stock to CCC+/RR6 from B.

The agency also affirmed M/I Homes' senior unsecured debt at BB- and assigned a recovery rating of RR2.

The outlook remains negative.

The downgrade reflects the difficult housing environment, Fitch said. The downgrades also reflect operating margins, further deterioration in credit metrics and erosion in tangible net worth from non-cash real estate charges.

M/I Homes developed about 80% of its communities from which it sells product, resulting in inventory turns that were moderately below average, the agency said.

M/I Homes has been cash flow positive and has reduced debt, Fitch noted.

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