While speculation continues to swirl about a pullback in the housing market, the homebuilder market is seeing slower top-line growth, ample unsecured credit agreement capacities and large cash balances. Combined, these factors have driven down debt issuance among home builders, and the trend is likely to continue, said Standard & Poor's.

After taking a look at the eighteen public conventional home builders that it rates, the rating agency noted that capital markets activity slowed noticeably among those companies since the beginning of 2006. In all, those companies under Standard & Poor's surveillance had $30 billion of publicly rated securities outstanding. In the first quarter, for example, Hovnanian Enterprises and KB Home issued $600 million in senior unsecured notes, down from the first quarter of 2005, when the homebuilder industry completed about eight ABS offerings totaling $2 billion. There is not much demand for refinancing, either, as less than $1.2 billion in deals are expected to mature in 2006.

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