TEXT-S&P revises KWG outlook to negative;affirms 'BB-' rating
Jan 11 (Reuters) - (The following statement was released by the rating agency)
Jan 11 -
-- KWG's cash flow adequacy could deteriorate more than we expect given that the prospects for property sales remain challenged in 2013.
-- A price-cutting strategy since 2011 and higher project costs, including land, might have compressed the China-based property developer's profit margin while borrowings continued to grow.
-- We are revising the rating outlook on KWG to negative from stable.
-- At the same time, we are affirming the 'BB-' long-term corporate credit rating on KWG and the 'B+' issue rating on the company's outstanding senior unsecured notes. In line with the outlook revision, we are lowering our long-term Greater China regional scale rating on the company to 'cnBB' from 'cnBB+' and on the notes to 'cnBB-' from 'cnBB'.
On Jan. 11, 2013, Standard & Poor's Ratings Services revised the rating outlook on China-based developer KWG Property Holding Ltd. to negative from stable. At the same time, we affirmed the 'BB-' long-term corporate credit rating on KWG and the 'B+' issue rating on the company's outstanding senior unsecured notes. As a result of the outlook revision, we lowered our long-term Greater China regional scale rating on KWG to 'cnBB' from 'cnBB+' and on the notes to 'cnBB-' from 'cnBB'.
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