Moody's upgrades Shea Homes

Moody's Investors Service said it upgraded Shea Homes LP’s corporate family rating and senior unsecured notes to Ba3 from B1 and the probability of default rating to Ba3-PD from B1-PD. The company's speculative grade liquidity rating is unchanged at SGL-2; however, the outlook was revised to stable from positive.

"The upgrade recognizes Shea Homes' improved credit profile as the company implements its growth strategy through the opening of new communities, which has resulted in margin growth and deleveraging," stated Griselda Bisono, a Moody's vice president and senior analyst, in a press release.

"We expect Shea Homes to weather the current weakening housing market well, and actually reduce leverage further, with debt to capitalization trending towards 31% by 2024 as a result of increased retained earnings and some debt repayment," added Bisono.

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