--IDR to 'CCC' from 'B-';

--Secured borrowings under its revolving credit facility to 'B+/RR1' from 'BB-/RR1';

--Unsecured borrowings under its revolving credit facility to 'CC/RR5' from 'B-/RR4';

--Senior notes to 'CC/RR5' from 'B-/RR4';

--Senior subordinated debt to 'C/RR6' from 'CCC/RR6'.

The Rating Outlook is Negative.

The 'RR1' on the secured advances under Standard Pacific's revolving credit facility indicates outstanding recovery prospects for holders of this debt issue. The 'RR5' on the company's unsecured notes and unsecured advances under its revolving credit facility indicate below-average recovery prospects for holders of these debt issues. Standard Pacific's exposure to claims made pursuant to performance bonds and joint venture debt and the possibility that part of these contingent liabilities would have a claim against the company's assets were considered in determining the recovery for the unsecured debt holders. The 'RR6' on Standard Pacific's senior subordinated notes indicate poor recovery prospects in a default scenario. Fitch applied a liquidation value analysis for these RRs.

The downgrade reflects the current very difficult U.S. housing market and Fitch's expectations that the housing environment remains challenging for the remainder of the year and perhaps into 2010. The sharply contracting economy and impaired mortgage markets are, of course, contributing to the housing shortfall. The ratings changes also reflect persistent negative trends in Standard Pacific's operating margins and further deterioration in credit metrics, notably leverage (with some debt reduction in recent years offset by erosion in tangible net worth from non-cash real estate charges and operating losses).

Cash flow from operations will probably sharply decline in 2009 and may shift negative in 2010. Real estate impairments should moderate this year, but will persist so long as home prices decline and the sales absorption rate shrinks.

The company had $626.4 million of cash at Dec. 31, 2008. Standard Pacific generated $263.2 million of cash during fiscal year 2008 ($62.5 million during the fourth quarter), which included $235.6 million of tax refunds received during the first quarter of 2008. For all of fiscal 2009, Fitch expects the company to be slightly cash flow positive, excluding a first quarter tax refund of $114.5 million. The company has some near term debt maturities, which will deplete some of its cash balance.