S&P puts Road King on watch

Standard & Poor's said it placed Road King Infrastructure Ltd.'s BB- long-term corporate credit rating on Credit Watch with negative implications, along with its BB- rating on the company's notes.

The agency also said it placed the cnBB+ Greater China Scale ratings on the company and its senior unsecured notes on CreditWatch with negative implications.

The negative watch reflects the company's weaker profit margin and contracted sales in the first half of 2011, S&P said.

The agency said it believes Road King's financial strength is likely to remain weak in the next year due to the deepening property market correction in China and the company's somewhat weak execution of its projects and sales.

S&P also said it expects the company's leverage to remain high in 2011 and may further increase due to weak sales and margins.

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