M.D.C. Holdings (MDC) Placed on Review for Downgrade at Moody's

Moody's Investors Service placed on review for downgrade the senior unsecured rating of M.D.C. Holdings (NYSE: MDC), which is currently at Baa3 with a negative outlook. This review was prompted by MDC's consistent year-to-date underperformance vs. our expectations for its earnings growth and improvement in its key credit metrics.

RATINGS RATIONALE

The review will focus on how quickly the company can restore its key credit metrics to investment grade levels. We had believed that the company was on track to achieving near investment grade levels for some of its key credit metrics by year-end 2014, and for a number of the other key metrics by year-end 2015. Given the company's fairly dramatic misses thus far this year on the various measures we look at to guage performance, the question becomes how quickly, if at all, the company can get back on track.

The principal methodology used in this rating was Global Homebuilding Industry published in March 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

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