S&P drops William Lyon

Standard & Poor's said it lowered its corporate credit rating on William Lyon Homes to D from CC and lowered the rating on the company's $138.8 million 10¾% unsecured notes due 2013 to D from C. The recovery rating on the notes remains a 6, indicating S&P's expectation for negligible recovery, the agency said.

"We lowered the issue rating because William Lyon failed to make its scheduled Oct. 1, 2011, semiannual interest payment of $7.5 million on its outstanding $138.8 million 10.75% unsecured notes due April 1, 2013," said S&P credit analyst Matthew Lynam in a news release.

"The indenture governing the 2013 senior notes allows for a 30-day grace period. However, the company did not make the scheduled interest payment within five business days of the due date. We lowered our corporate credit rating to D because we believe the company will fail to meet its remaining obligations as they come due."

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