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S&P affirms Meritage Homes ratings, changes outlook

S&P Global Ratings affirmed its BB issuer credit rating on Meritage Homes Corp. and revised the ratings outlook to positive from stable.

The rating agency also affirmed its BB issue-level rating on the homebuilder's senior unsecured borrowings.

Ratings said Meritage continues to bolster its credit metrics even as the housing market recovery shows signs of maturing.

The positive outlook takes into account the ratings agency's view that the homebuilder will continue to sustain its debt to EBITDA below 3x, with an expectation that it will reduce its debt below the $1.0 billion mark by late 2020.

The rating agency also expects Meritage to keep expanding its platform focused on entry-level product, sustain its gross margin around 21%, and further pare its overall debt.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.