Liquidity has generally been a key credit support for U.S. homebuilders through much of the deep and prolonged downturn. Los Angeles-based KB Home announced that it had agreed to settle certain off-balance-sheet liabilities for a larger amount than we previously anticipated. We revised our outlook to negative to reflect the risk that the cash settlement, a pending maturity, and working capital needs could constrain the homebuilder's financial flexibility. We affirmed our 'B+' corporate credit rating, which continues to reflect a highly leveraged financial profile and a persistently weak new home sales environment. We also affirmed our 'B+' ratings on the senior unsecured notes. On June 28, 2011, Standard&Poor's Ratings Services revised its outlook on Los Angeles-based KB Home
