DOW JONES NEWSWIRES Fitch Ratings lifted the threat of a downgrade on Ryland Group Inc. (RYL) for the time being. The credit agency Thursday raised its outlook on the home builder to stable due to its improved liquidity and operating results as the housing market starts to rebound. The agency said Ryland's rating--which it affirmed at BB, two notches into junk territory--reflects how successful Ryland has been in executing its conservative land and construction strategies, as well as the diversity of its products and geographic markets. Those factors are all tempered by the fact the U.S. housing market remains challenging, even if it is looking up. Like many builders, Ryland swung to a profit when it reported first-quarter results in April, as it benefited from higher revenue and a homebuyers' tax credit that stoked demand. Thursday, Fitch noted the company positioned itself in recent years to withstand a housing downturn, avoiding the acquisitions that many other builders pursued before the housing bubble burst. The agency also highlighted how Ryland's liquidity levels have allowed the company to start rebuilding its land position, a strategy Fitch said it was comfortable with given its level of free funds and a well-paced schedule of debt maturities. Ryland shares were down 0.1% at $16.70 after hours. The stock is flat with its level a year ago, underperforming the market in general. -By Joan E. Solsman, Dow Jones Newswires; 212-416-2291; joan.solsman@dowjones.com
