Skip navigation
Watchlist Sponsored By :

Current DateTime: 11:30:42 05 Jul 2009
LinksList Documentid: 24355697
  • Collection of Michael Jackson

      Earlier this year, Jackson sought to auction his personal items. Although it never came through, here's a look at what was almost sold.

  • Recession-Resistant US Cities

      Some cities have been hit much harder than others during the recession. Here are the metro areas faring the best.

  • How Much For A T-Bone Steak?

      From the cost of a T-bone steak to a monthly phone bill, the price for everyday items can vary dramatically across the country.


Current DateTime: 11:30:42 05 Jul 2009
LinksList Documentid: 24890560
  • Boom, Bust and Blame

      The inside story of the economic crisis that has gripped the entire world.

  • E3: Gaming's Cutting Edge

      North America's premier computer and video game trade show draws tens of thousands of professionals to experience the future of interactive entertainment.

  • The Fall of GM

      A look into the fall of General Motors as the automaker heads toward bankruptcy and an effective nationalization.

By: Reuters | 11 Oct 2007 | 11:01 AM ET
Text Size

Moody's Investors Service on Thursday cut its ratings on home builders Centex, Lennar and Pulte Homes to junk status, saying it expects bleak housing industry conditions to linger at least until 2009.

The downgrades affect about $9.4 billion of debt and $3.25 billion of commercial paper authorizations, Moody's said.

Key problems facing homebuilders include rapidly declining orders, high housing inventories, disruptions in the mortgage market and heavy cancellations, Moody's said in a statement.

Affordability issues are also weighing on key markets while confidence is ebbing among potential homebuyers, Moody's said.

It will be challenging for the three companies, as well as for much of the entire industry, to stay in compliance in the coming year with debt leverage covenants, the rating agency said. Covenants are restrictions in borrowing agreements.

Moody's lowered Lennar's [LEN  Loading...      ()   ] senior unsecured rating by two notches to "Ba1," the highest junk rating, from "Baa2"; Pulte's [PHM  Loading...      ()   ] senior unsecured rating by one notch to "Ba1" from "Baa3"; and Centex's [CTX  Loading...      ()   ] senior unsecured rating by two notches to "Ba1" from "Baa2." The outlook on all three companies is negative, meaning another rating cut is likely over the next 12 to 18 months.

Moody's had previously cut credit ratings for builders K. Hovnanian Enterprises [HOV  Loading...      ()   ] and Beazer Homes USA [BZH  Loading...      ()   ]. Standard & Poor's also has notified more than a dozen builders that their credit ratings are in jeopardy.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon


Current DateTime: 01:01:23 05 Jul 2009
LinksList Documentid: 29778428

Current DateTime: 01:01:22 05 Jul 2009
LinksList Documentid: 29779196

Current DateTime: 01:01:22 05 Jul 2009
LinksList Documentid: 29779199

Current DateTime: 01:01:22 05 Jul 2009
LinksList Documentid: 29779198
CNBCCNBC
About CNBC  |  Site Map  |  Privacy Policy  |  Terms of Service  |  Video Reprints  |  Advertise  |  Help  |  Contact
Partners: AOL Money  |  BloggingStocks.com
CNBC is a Division of NBC Universal
  Data is a real-time snapshot *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
Thomson ReutersThomson Reuters