Moody's upgraded Lennar Corp.'s ratings, including its corporate familyrating to Ba1 from Ba2.
The company's probability of default rating was alsoupgraded to Ba1-PD from Ba2-PD, while ratings on all of its existing series ofsenior unsecured notes and convertible senior notes went to Ba1 from Ba2. Atthe same time, the rating agency affirmed the homebuilder's speculative-gradeliquidity rating at SGL-1.
The ratings outlook is stable.
According to Moody's, the upgrade takes into account itsopinion that Lennar is adopting "a financially prudent business strategyafter a number of years of investing in new asset classes and structures thatkept debt leverage stubbornly high."
The Ba1 corporate family rating reflects Lennar's loweringdebt leverage and its effective execution of the "soft pivot"strategy. The stable outlook, meanwhile, reflects the ratingagency's expectation that the company's key credit metrics will strengthenfurther in the next 12 to 18 months.
Moody's said in a note that it expects the company's debtleverage to be in the low 40% range by 2016-end.