S&P rates M/I Homes notes B+

Standard & Poor's said it assigned its B+ issue-level rating to M/I Homes Inc.'s proposed offering of $300 million of unsecured senior notes due 2020.

The 2 recovery rating on the debt indicates the agency’s expectation for substantial (70% to 90%; low end of the range) recovery in the event of default. The B corporate credit rating and positive outlook remain unchanged.

M/I Homes plans to use the proceeds from the offering primarily to retire $230 million of unsecured senior notes due 2018, which bear an interest rate of 8 5/8% and will be redeemable at 102.16 as of Nov. 15.

The company indicated it plans to use the remaining proceeds to repay outstanding borrowings on its revolving credit facility. The new notes, in addition to the existing unsecured revolver, will rank ahead of the company’s convertible senior subordinated notes.

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