Credit-default swap traders are now betting that it's more likely than not the Los Angeles-based homebuilder will fail over the next five years. The company's implied default odds jumped to 52 percent, up from 41 percent a month ago, after KB Home struggled to close deals in its first quarter, when 36 percent of transactions fell through, compared with the industry average of 23 percent, according to debt researcher Gimme Credit LLC.

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