Moody’s raises New Home

Moody’s Ratings said it upgraded New Home Co. Inc.’s senior unsecured notes to B2 from B3, its corporate family rating to B2 from B3 and its probability of default rating to B2-PD from B3-PD. Moody's also withdrew the SGL-3 speculative grade liquidity rating.

"The upgrade recognizes New Home's improved credit profile as the company implements its growth strategy through the opening of new communities, resulting in margin growth and increased geographic diversity," said Griselda Bisono, a Moody’s vice president and senior analyst, in a press release.

New Home has expanded its geographic footprint outside of California into the neighboring states of Arizona, Colorado, Oregon and Washington.

"California made up 62% of home sales revenue in fiscal year 2023 compared to 72% in 2021, and we expect this exposure will be below 50% by 2025," added Bisono.

In November, New Home acquired Hamilton Thomas Homes expanding into the Houston and Austin markets. The upgrade also reflects improved leverage, with adjusted debt-to-book capitalization forecasted to stay under 50% over the next two years.

The outlook remains stable.

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