Monday, October 09, 2006

moody´s lowers rating of wci

das dürfte wohl nicht das letzte downgrade sein. damit dürfte meine prognose das wci in 1q 2007 vor dem kollaps steht noch realistischer sein. bin gesapnnt wann andere builder folgen.

dank geht an mish

The following is a press release from Moody's Investors Service:
Moody's Lowers Ratings Of Wci Communities; Outlook Negative
Approximately $650 Million of Debt Securities Affected

New York, October 06, 2006 -- Moody's lowered the ratings of WCI Communities, Inc. ("WCI"), including its corporate family rating to Ba3 from Ba2 and the ratings on its senior subordinated notes to B1 from Ba3. This concludes the review that was commenced on July 24, 2006. The ratings outlook is negative.

The downgrade was triggered by a series of increasingly unfavorable developments regarding WCI's new orders, cancellation rates, and revenue and earnings generation, which could be exacerbated if the company's additional share repurchases are not balanced with sizable reductions in outstanding debt to address appropriately its relatively high current debt leverage--now in the mid-60% area.

Going forward, the ratings could be reduced again if the company were unwilling or unable to reduce debt leverage at year end to the mid-to-high 50% range, if earnings turned sharply negative, or if covenant compliance became problematic.
Going forward I expect this is what I expect:

  • Ratings to be reduced
  • WCI unwilling or unable to reduce debt leverage
  • Earnings turning sharply negative
  • Covenant compliance becoming problematic
Just the Facts Maam

*DJ WCI Communities Updates Third Quarter Earnings Guidance>WCI
*DJ WCI Communities Inc. Lowers 3Q Earnings Guidance >WCI
*DJ WCI Communities Sees 3Q EPS 'Significantly Below' Prior View Of 52c
*DJ WCI Communities Says Still Expects To Report Positive 3Q Net Income
*DJ WCI Communities Cites $13M Write-Off Tied To Land Options
*DJ WCI Communities: Write-Off Cost Co 18c/Shr
*DJ WCI Communities Sees 3Q Combined Tower, Traditional New Orders To Fall 80%



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