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Fitch boosts Technical Olympic loan, cuts notes
Fitch Ratings said it revised the ratings of Technical Olympic USA, Inc.'s revolving credit facility, senior unsecured notes and senior subordinated notes to reflect the changes in priority of debt repayments following the company's $800 million revolving credit facility being changed from an unsecured facility to a secured facility.
The company's issuer default rating remains at B+ and Technical Olympic's ratings remain on rating Watch negative.
The following ratings are revised by Fitch: secured revolving credit facility to BB from BB-, senior unsecured notes to B- from BB- and senior subordinated debt to CCC+ from B-.
Fitch added it assigned a recovery rating of RR1 to Technical Olympic's amended secured revolving credit facility, noting that although an RR1 would typically warrant a 3-notch upgrade from the B+ issuer default rating to BB+, Fitch is assigning a BB rating to the secured revolving credit facility, reflecting potential uncertainties pertaining to the restructuring of Technical Olympic's Transeastern joint venture and the current, quite weak housing environment in most of the key markets.
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