S&P Global Ratings assigned a B issuer credit rating to Adams Homes Of Northwest Florida Inc., with a stable outlook.
The B rating reflects the company's relatively small scale and geographic concentration in the southeast U.S. and Florida, which risks greater EBITDA volatility compared to peers. This is offset by a moderate adjusted leverage of just under 4x EBITDA, providing cushion for some pressure at the current rating.
The stable outlook reflects the rating agency's expectation for adjusted leverage at slightly less than 3x EBITDA over the next year, as new home sales in the company's southeastern U.S. markets outpace flat sales nationwide. The outlook includes some margin for deterioration if demand for homes drops moderately in Florida and other markets in the region.
The ratings agency expects the company to maintain stronger credit ratios than typically associated with the rating while the housing industry remains relatively healthy and stable.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings.