S&P May Cut Beazer Homes Debt Ratings

New York, NY, August 15, 2007--Standard & Poor's said it may cut its ratings on Beazer Homes, citing the home builder's delay in filing its third-quarter report due to accounting restatements.

Beazer said late on Friday that its former chief accounting officer may have caused some liabilities to have been recorded in prior accounting periods in excess of amounts appropriate under generally accepted accounting principles.

Resolution of the issues would not result in an adjustment to its previously reported cash position, Beazer said in a filing with the U.S. Securities and Exchange Commission.

The possible downgrade reflects "additional pressure and distractions Beazer's management faces on a number of non-operational fronts, including separate pending investigations by the SEC and the U.S. Attorney's Office in the Western District of North Carolina, during a very challenging period for all home builders," S&P said in a statement.

"We will lower the ratings if the filing delay becomes protracted, other accounting or financial reporting issues not currently disclosed arise, the issues causing the delay are more significant than expected, or the company's currently adequate liquidity position weakens," S&P said.

S&P rates Beazer's senior unsecured debt "BB-minus," three levels below investment grade.

Fitch Ratings on Monday cut its issuer default rating on Beazer to "BB" and Moody's Investors Service said it may also lower the home builder's rating from "Ba2," both two levels below investment grade.