OREANDA-NEWS. S&P Global Ratings said today it assigned its 'B-' issue-level rating (same as the corporate credit rating) to Atlanta-based homebuilder Beazer Homes USA Inc.'s proposed $300 million senior unsecured notes due 2022. The recovery rating is '4', indicating our expectation of average (30% to 50%, upper half of the range) recovery in the event of payment default.

The company will use the proceeds to fund the repayment of its existing secured notes, with any remaining proceeds for general corporate purposes. Our corporate credit rating on Beazer reflects our view of the company's business risk as vulnerable, due largely to our view of the sector's cyclical nature and the company's relatively small platform compared with most public homebuilding peers. We assess the company's financial risk as highly leveraged, because debt to EBITDA was about 8x as of June 30, 2016. For more information, see the summary analysis on Beazer published June 30, 2016.