Moody's cuts Road King view to negative

Moody's Investors Service said it changed to negative from stable the outlook for the Baa2 issuer rating of Road King Infrastructure Ltd. and the Baa2 senior unsecured rating for the bond issued by Road King Infrastructure Finance (2004) Ltd. and guaranteed by Road King.

The change in outlook primarily reflects Moody's concern over Road King's investments in its non-core residential property development projects in China, which will increase its overall business risk profile and cash flow volatility.

Furthermore, the additional capex spent on property projects means limited room for debt reduction, and total debt/gross cash flow is likely to reach almost 3x in the next two years, exerting downward pressure on the current rating.

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