Moody's rates Lippo Karawaci notes B1

Moody's Investors Service said it assigned a B1 senior unsecured rating to the proposed dollar-denominated bonds to be issued by Sigma Capital Pte. Ltd. and guaranteed by PT Lippo Karawaci Tbk. The agency also said it affirmed the company's B1 corporate family rating and the B1 senior unsecured rating on its guaranteed $250 million bonds due 2011.

The outlook is stable.

A successful completion of a bond exchange offer would materially enhance the company's liquidity and financial flexibility, Moody's said.

The increased borrowing will weaken its projected EBITDA interest coverage to below 2 times in 2010 and position it at the weak side of its B1 rating, the agency said.

However, an expected improvement in EBITDA upon commencement of the new hospitals and increased property sale by 2011 will restore the ratio back to about 2.5 times, a level appropriate for the B1 rating, Moody's added.

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