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S&P rates New Home notes B-
S&P said it assigned B- issue-level and 3 recovery ratings to the New Home Co. Inc.'s new senior unsecured notes. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 60%) recovery if the company defaults.
The B- issuer, B- issue and 3 recovery ratings on New Home’s outstanding debt are unchanged, S&P said.
New Home will issue new senior notes with an increased coupon (to 8¼%) at the settlement date stepping up to 11% on Oct. 15, 2025, and 12¼% on Oct. 15, 2026 and a later maturity date October 2027, which it will exchange par-for-par for any and all of its existing 7¼% senior unsecured notes due October 2025.
“We see the proposed transaction as largely proactive treasury management due to the par value exchange, step-up in interest rate and extended maturity by two years. We continue to expect the company will operate with debt leverage at or near current levels over the next 12 to 24 months,” the agency said in a press release.
The outlook is stable.
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