Fitch cuts Lippo Karawaci view to negative

Fitch Ratings said it revised the outlook on PT Lippo Karawaci Tbk's ratings to negative from stable and affirmed the long-term foreign-currency and local-currency issuer default ratings at B+, national long-term rating at BBB+(idn) and B+ rating with recovery rating of RR4 on its $250 million senior unsecured notes due 2011 issued by Lippo Karawaci Finance BV and guaranteed by LK.

The outlook revision reflects a concern that the company's cash flow generation may be affected by the slowdown in the Jakarta property market, which is more severe and protracted than initially expected, Fitch said. Although the company may be able to mitigate some of this risk by re-phasing some of its development projects, the agency said it believes that a low take-up rate could possibly weaken the company's credit profile.

The ratings are supported by its position as one of the leading property developers in Indonesia with a diversified revenue base and project portfolio, strong liquidity position and significant cash flow from recurring businesses, Fitch said.

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