Moody’s views Miller Homes negatively

Moody’s Investors Service said it changed its outlook for Miller Homes Group (finco) plc to negative from stable and affirmed its ratings, including the B1 instrument ratings of the company's £425 million of backed senior secured fixed-rate notes due 2029 and €465 million of backed senior secured floating-rate notes due 2028.

“The change in outlook to negative from stable reflects the risk that Miller Homes' key ratios will deteriorate and remain weaker than expected for the B1 rating category. This is in an environment of a slowdown of the U.K. homebuilding market with higher mortgage rates, lower house prices and expectations of decreasing number of sold houses in 2023,” the agency said in a press release.

Moody's said it anticipates Miller Homes' Moody's adjusted EBIT interest cover to weaken to around 2x in 2023 before recovering to around 2.5x in 2024 from about 2.7x in 2022 pro forma for the new capital structure. The company's Moody's adjusted debt to EBITDA will increase to around 6x in 2023 from about 4.1x in 2022.

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