S&P upgrades Taylor Wimpey

Standard & Poor's said it raised the long-term corporate credit rating on Taylor Wimpey plc to BB from BB-, along with the rating on its bonds due 2015 to BB from BB-.

The recovery ratings on these bonds remain unchanged at 3, indicating 50% to 70% expected default recovery.

The outlook is stable.

The ratings reflect Taylor Wimpey's credit metrics, which were significantly better than the credit metrics forecast in the base-case scenario for 2012 and are likely to be maintained at these levels over the medium term, S&P said.

Taylor Wimpey is well positioned to generate sufficient cash flows from home sales to keep cash flow leverage metrics in line with a significant financial risk profile, the agency said.

Higher operating profit and lower interest expenses should help offset rising working capital needs caused by increased work-in-progress and land acquisitions, S&P added.

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