S&P: William Lyon notes B-

Standard & Poor’s said it affirmed the B- corporate credit and senior unsecured debt ratings on William Lyon Homes Inc. and removed the ratings from CreditWatch, where it was placed with developing implications in June.

The agency also said it assigned a B- senior unsecured debt rating to $250 million of senior notes due 2022 offered through the company’s wholly owned subsidiary, WLH PNW Finance Corp.

The outlook is positive.

The ratings reflect the company’s vulnerable business risk and highly leveraged financial risk profiles, S&P said.

William Lyon is a relatively small homebuilder with a geographic concentration of operations in California, Arizona, Nevada and Colorado, the agency said.

The recently announced agreement to acquire the homebuilding operations of Polygon Northwest for $520 million also expands the company’s presence to Seattle and Portland, S&P said.

The acquisition improves William Lyon’s scale and geographic diversity, the agency said.

The outlook is positive based on a view that the Polygon Northwest acquisition improves the diversity and scale of the company’s operating platform while offering meaningful market share in relatively stronger homebuilding markets, S&P said.

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