Moody’s gives New Home CFR, notes B3

Moody's Investors Service said it assigned New Home Co. a B3 corporate family rating, a B3-PD probability of default rating, a B3 rating to the proposed $250 million of senior unsecured notes due 2022 and an SGL-2 speculative grade liquidity rating.

The outlook is stable.

Moody’s said the B3 corporate family rating reflects New Home’s limited history, small size and scale, relatively thin net worth position and significant geographic concentration.

“At the same time, however, the B3 is supported by a conservative balance sheet for a B3, including pro forma adjusted debt leverage of about 51% and a completely unsecured debt capital structure; its solid relationship with the Irvine Co., which exclusively uses New Home as the fee builder for its own homebuilding entity; and the experience of some of its key executives and their prior success with John Laing Homes,” the agency said in a news release.

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