U.S.-based Shea Homes L.P. plans to refinance its existing $750 million senior secured notes due 2019 with new unsecured notes split into two tranches due 2023 and 2025. In conjunction with the note refinancing, Shea will replace the existing $125 million secured revolving credit facility with a new $175 million unsecured revolving credit facility. The transactions allow Shea to significantly reduce annual interest costs, enhance financial flexibility, increase liquidity, and extend/stagger the debt maturity profile. The company has outperformed relative to our prior expectations, notably its leverage and coverage measures, reflecting above-average margins compared with peers. We are raising our corporate credit rating on Shea to 'B+' from 'B'. We are assigning our 'B+' issue-level rating to the company's new
