Moody’s ups M/I Homes, convertibles; rates notes B1

Moody's Investors Service said it upgraded M/I Homes Inc.'s corporate family rating to B1 from B2 and assigned a B1 rating to its proposed $300 million senior unsecured notes due 2020.

Concurrently, the agency raised the probability of default rating to B1-PD and senior subordinate convertible notes to B3, and affirmed the preferred stock at Caa1.

Furthermore, Moody's affirmed M/I Homes' speculative-grade liquidity rating at SGL-2.

The outlook was changed to stable from positive.

Proceeds from the proposed note offering will be used to refinance the company's senior notes due in 2018 with the remainder going toward reducing outstanding revolver borrowings.

Moody’s said the upgrade of M/I Homes' corporate family rating to B1 reflects an expectation for continued improvement in credit metrics with homebuilding debt to capitalization at or near 45% at the end of 2016 from pro forma 49% at Sept. 30. Furthermore, the upgrade recognizes the company conservative and judicious balance sheet management style by using low levels of debt to grow the company's homebuilding revenue base to close to $1.3 billion (as of Sept. 30), the agency said.

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