S&P lowers William Lyon

Standard & Poor's said it lowered its corporate credit rating on William Lyon Homes to CC from CCC.

At the same time, the agency said it lowered its issue-level ratings on the company's senior unsecured notes.

The outlook is negative.

S&P added that the downgrade follows the company's recent announcement of a proposed debt restructuring that it considers to be a distressed exchange and, as such, tantamount to a default under its ratings criteria.

The agency noted that it would expect to lower the corporate credit rating on the company to SD and lower the issue-level ratings on the senior unsecured notes to D upon completion of the tender offer, adding that it would then, shortly thereafter, assign a new corporate credit rating to William Lyon based on the company's new capital structure and liquidity profile.

S&P said that its preliminary expectation is that its corporate credit and issue-level ratings would return to the CCC category upon completion of the tender offer.

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