S&P boosts Kaufman & Broad

Standard & Poor's said it raised its long-term corporate credit rating on Kaufman & Broad SA (KBSA) to BB+ from BB, reflecting its solid credit measures.

At the same time, the rating on KBSA's €150 million senior unsecured notes was raised to BB from BB-.

The outlook is stable.

S&P noted the upgrade acknowledges KBSA's consistent revenue and earnings growth over the past few years, above-par financial profile and its expectation that its market positions, prudent operating strategy and relatively flexible cost structure will continue to underpin the group's credit quality in the future.

The ratings on KBSA are constrained by the group's narrow business focus and the property development industry's above-average risk profile - owing to its high fragmentation, volume and price cyclicality together with an inherently speculative element and heavy working capital needs, S&P added.

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