S&P rates New Homes notes B-

S&P said it assigned B- issue-level and 3 recovery ratings to New Home Co. Inc.'s new $325 million of unsecured senior notes due in 2029. The 3 recovery rating indicates meaningful (50%-70%; rounded estimate: 50%) recovery if the issuer defaults.

The ratings align with those of New Home’s outstanding senior unsecured notes.

New Home is expected to use the proceeds to refinance the 8¼% senior unsecured notes due in 2027, pay down balances on its $180 million revolving credit facility due in 2027, cover fees and expenses, and for general corporate purposes. About $30 million-$40 million cash on the balance sheet will further strengthen its liquidity profile and enable the company to continue to invest in the business.

The outlook is stable.

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