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Fitch affirms M.D.C. Holdings' long-term issuer default rating

Fitch Ratings affirmed M.D.C. Holdings Inc.'s long-term issuer default rating at BBB-, with a stable outlook.

The rating agency highlighted the homebuilder's steady capital structure, conservative land policies, land and development spending, presale strategy, and geographic and product diversification as among the key rating drivers.

The company's investment grade rating mirrors Fitch's view that M.D.C. can successfully manage its balance sheet through the cycle. Fitch noted that the company surpassed most of its competitors in reducing land and development spending during the last housing downturn, owing to its land and capitalization policies.

Moving ahead, Fitch expects M.D.C. will register negative cash flow from operations in the range of $150 million to $200 million during 2018, as its land and development spending is estimated to be "meaningfully higher" year over year.