S&P keeps Kaufman & Broad on watch

Standard & Poor's said its BB+ long-term corporate credit rating on Kaufman & Broad SA remains on CreditWatch with negative implications where it was originally placed on Oct. 26, 2006, following the CreditWatch negative placement of the parent KB Home (BB+/Watch negative).

The ratings on Kaufman & Broad are constrained by the group's narrow business focus and the property development industry's above-average risk profile - including high fragmentation, volume and price cyclicality combined with an inherently speculative element and heavy working-capital needs, the agency said.

S&P noted that these negative factors are offset by the company's strong regional positions in the domestic new housing market, prudent risk policies, a long cycle-tested track record and an intermediate financial profile.

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