S&P rates Orleans, loan B-

Standard & Poor's said it assigned a preliminary B- corporate credit rating to Orleans Homebuilders Inc., preliminary B- rating to the company's proposed $125 million secured term loan and a preliminary 3 recovery rating on the secured term loan, indicating 50% to 70% recovery in a default.

The outlook is stable.

The ratings are subject to Orleans' timely emergence from bankruptcy and consummation of its plan of reorganization in line with expectations, including its proposed exit financing, which the U.S. Bankruptcy Court in Delaware confirmed on Dec. 1, S&P said.

The ratings are subject to the company finalizing the terms of the $30 million senior secured revolving credit facility and $125 million secured term loan, the agency said.

The stable outlook reflects an expectation that new home sales will revert back to pre-petition levels in the near term and the company will begin to generate cash through the liquidation of existing inventory by the second half of 2011, S&P added.

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