William Lyon Homes has performed less favorably than our previous forecast. Due to lower margins and increased debt, leverage improvement has not materialized as we had forecast and has therefore tempered our view of the potential for a higher rating over the next 12 months. As a result, we are revising the rating outlook on the company to stable from positive. We are affirming our 'B-' corporate credit rating on the company and our issue-level rating on its senior unsecured notes. The recovery rating on the notes remains '3' (50%-70%). The outlook revision reflects our revised expectations that debt to EBTIDA will remain above 5x on a weighted average basis for the next 12 months. On Oct. 25, 2016, S&P
