S&P lowers New Home view to negative

S&P said it revised the outlook on the New Home Co. to negative from stable and affirmed the B- issuer credit rating on the company and the B- rating on its senior unsecured notes.

The recovery rating on the notes remains at 3.

The company's leverage has risen to 10x and its debt-to-capital ratio to 63% as the company continues to draw on its revolver to fund land spending and new community development, S&P said.

The company underperformed earnings expectations for 2018 because of construction delays and lower closings and that could continue in 2019, the agency said.

The company's liquidity is constrained by elevated borrowings in its revolver to support expansion and community development, S&P said.

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