Research Update: Shea Homes L.P. Upgraded To 'BB-' On Operating Momentum, Outlook Stable; Debt Ratings Affirmed

California-based Shea Homes L.P., has maintained its operating momentum, outperformed our 2023 estimates, and is forecasted to remain below 3x through 2024. Therefore, S&P Global Ratings raised its issuer credit rating on the company to 'BB-' from 'B+'. At the same time, we affirmed our issue-level rating on the company's senior unsecured notes at 'BB-' and revised the recovery rating to '3' from '2' based on our recovery criteria. The stable outlook reflects our forecast that Shea's debt to EBITDA will remain below 3x for the next 12 months while its debt to capital trends toward the 25%-30% range. The company's continued operating momentum, new community count growth, and earnings forecasted in 2024 will help it sustain our forecasted leverage

...- California-based Shea Homes L.P., has maintained its operating momentum, outperformed our 2023 estimates, and is forecasted to remain below 3x through 2024. - Therefore, S&P Global Ratings raised its issuer credit rating on the company to '##-' from 'B+'. - At the same time, we affirmed our issue-level rating on the company's senior unsecured notes at '##-' and revised the recovery rating to '3' from '2' based on our recovery criteria. - The stable outlook reflects our forecast that Shea's debt to EBITDA will remain below 3x for the next 12 months while its debt to capital trends toward the 25%-30% range. The company's continued operating momentum, new community count growth, and earnings forecasted in 2024 will help it sustain our forecasted leverage metrics....

Research Update