KB Home’s unsecured debt may be downgraded
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Standard & Poor’s and Fitch Ratings said they might cut their ratings on Los Angeles-based KB Home.
The fifth-biggest builder postponed its third-quarter report, saying it had not concluded its review of stock option grants. The delay triggered a notice of default on some of KB’s debt.
The rating firms are concerned that the delay will lead to additional claims of default. Both S&P; and Fitch rate KB’s senior unsecured debt BB-plus, one level below investment grade.
Separately, No. 2 home builder Pulte Homes Inc. of Bloomfield Hills, Mich., said third-quarter profit plunged 52% to $190.2 million, or 74 cents a share, from $395.4 million, or $1.50, a year ago.
The company’s sales dropped 6% to $3.56 billion.
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