S&P Downgrades M/I Homes

The corporate credit and senior unsecured debt ratings on M/I Homes Inc. have been downgraded from B-plus to B by Standard & Poor's Ratings Services. S&P also downgraded M/I's 9.75% preferred stock from CCC-plus to C. The outlook remains negative. "The lowering of the credit rating reflects a weaker second quarter than we originally anticipated," S&P credit analyst Lisa Wright said. "We expect further operating pressure amid very challenging conditions in the company's mid-Atlantic and Florida markets and are concerned that the company will face additional significant impairment charges over the next year." S&P said the preferred stock downgrade was due to the company's announcement that it is barred from paying stock dividends because of a restricted payments basket covenant under its senior notes indenture. The rating agency can be found online at http://www.standardandpoors.com.