S&P lifts debt ratings on D.R. Horton, PulteGroup

S&P boosts ratings for homebuilders D.R. Horton, PulteGroup, expects revenue growth

Associated Press

Standard & Poor's has raised its debt ratings for homebuilders D.R. Horton Inc. and PulteGroup Inc., saying it expects the companies' revenue to grow over the next 12 months as home sales and prices pick up.

That should help improve the companies' profitability and strengthen their credit risk profile, the credit rating firm said Wednesday.

S&P raised its rating on both homebuilders' debt, including their corporate credit and issue-level ratings, by one notch to "BB" from "BB-." The new rating remains in the non-investment, or "junk" category, according to S&P's rankings.

The firm's rating outlook on PulteGroup and D.R. Horton is stable.

The rating action affects roughly $2.1 billion of PulteGroup's unsecured debt rated by S&P and about $3 billion of unsecured debt held by D.R. Horton.

S&P credit analyst Susan Madison said she expects the homebuilders' margins to improve as they sell more homes from a stable base of open home communities.

Shares of PulteGroup, based in Bloomfield Hills, Mich., dipped 7 cents to $18.95 in afternoon trading. Shares in Fort Worth, Texas-based D.R. Horton slipped 32 cents to $20.59.

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