Standard & Poor's Ratings Services on Friday lowered its non-investment grade corporate credit and senior unsecured debt ratings for Lennar Corp. to "BB" from "BB+," citing the effects of the housing slump on the homebuilder's profitability.
The outlook remains negative. The downgrade affects about $2.2 billion of senior unsecured notes.
"The downgrade reflects Lennar's very weak profitability so far in this housing downturn, along with our expectation that the company will face ongoing earnings pressure due to worsening operating conditions, particularly in its important California and Florida markets," S&P Credit Analyst James Fielding said in a statement.
Fielding said that lower home prices and slower sales have resulted in very high impairments and other noncash charges, reducing shareholder equity.
Lennar shares rose a penny to $20.02 in aftermarket trading, after falling 43 cents, or 2.1 percent, to $20.01 in the regular session.
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