Research Update: Toll Brothers Inc. Downgraded To Speculative-Grade 'BB+' Rating On Weaker Housing Recovery Assumptions; Outlook Stable Jun 11

Standard & Poors, June 2011

Abstract
The spring selling season was weaker than we had previously anticipated and we now expect the housing market to take longer to recover. It is our view that Pennsylvania-based Toll Brothers has positioned itself to stem losses and preserve liquidity in a weak operating environment, but key credit measures may now take longer to fully recover to stronger, pre-downturn levels. We lowered our corporate credit rating on Toll Brothers and its subsidiary, Toll Brothers Finance Corp., to 'BB+' from 'BBB-'. We also lowered our ratings on roughly $1.5 billion of senior unsecured notes and assigned our '3' recovery rating to those notes, which reflects our expectation for meaningful (50%-70%) recovery in the event of default. Our stable outlook acknowledges the...

Companies mentioned in this report are: Toll Brothers Inc.,Toll Corp.,Toll Brothers Finance Corp.
Action: Downgraded
Action: Outlook: Stable

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

Toll Brothers Inc.,Toll Corp.,Toll Brothers Finance Corp.

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