Fitch assigns Landsea Homes B

Fitch Ratings said it assigned Landsea Homes Corp. a B first-time long-term issuer default rating. Fitch also assigned B+/RR3 ratings to the company's unsecured revolving credit facility, $250 million of 11% senior unsecured notes due 2028 and planned offering of senior unsecured notes. The outlook is stable.

“The B IDR reflects the company's small scale, limited geographic diversity, high leverage and adequate financial flexibility. The company's leading positions within its local markets and balanced land strategy along with volatile cash flow generation and concentrated ownership are also factored into the rating.

“The stable outlook reflects Fitch's expectation that housing demand will improve slightly in 2024 and Landsea will continue to have meaningful rating headroom relative to Fitch's negative sensitivities for the B IDR,” the agency said in a press release.

The proceeds will be used to repay borrowings under the company's unsecured revolver due 2025.

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