S&P affirms Taylor Morrison

Standard & Poor's said it affirmed the B+ corporate credit rating on TMM Holdings LP.

The BB- rating and 2 recovery rating on the existing 7¾% notes due 2020 co-issued by operating subsidiaries Taylor Morrison Communities Inc. and Monarch Communities Inc. and guaranteed by the parent TMM Holdings are unchanged by the $125 million add on.

The 2 recovery rating indicates 70% to 90% expected recovery in a default.

The proceeds will be used to acquire land and for general corporate purposes.

S&P also affirmed the B+ corporate credit rating on Taylor Morrison.

The outlook is stable.

The ratings reflect the company's weak business risk profile, the agency said.

Although Taylor Morrison is one of the larger North American homebuilders with operations in both the United States and Canada, the homebuilding industry is very fragmented and highly cyclical, S&P said.

After a very severe six-year downturn in housing demand, U.S. home sales are increasing, the agency said, it expects this improvement to continue over the next 12 to 18 months.

But given the current weak economic environment, the agency said it views the housing recovery as fragile and vulnerable to unexpected economic shocks.

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