U.S.-based William Lyon Homes Inc. recently announced an agreement to acquire the residential homebuilding operations of Polygon NorthwestCo. LLC for about $520 million. The company has secured bridge financing to fund the entire amount of the acquisition, but intends to use cash on hand and secure long-term financing through future capital markets transactions for the balance of the transaction. We are placing our 'B-' corporate credit rating on William Lyon Homes on CreditWatch developing. In addition, we are placing our 'B-' issue-level ratings on William Lyon's senior unsecured debt on CreditWatch developing. To resolve the CreditWatch, we will review the implications to leverage and covenant headroom, along with the greater scale and diversity of the combined company, as soon as
