Fitch: Lippo Karawaci notes BB-

Fitch Ratings said it assigned an expected BB- rating to PT Lippo Karawaci Tbk.'s proposed dollar-denominated 7% senior unsecured notes due in 2022.

The notes will be issued by Lippo's wholly owned subsidiary, Theta Capital Pte Ltd. and guaranteed by Lippo and its subsidiaries.

The notes are rated at the same level as Lippo's senior unsecured rating as they represent unconditional, unsecured and unsubordinated obligations of the company, Fitch said.

The proposed notes will form a part of the same series as the existing $150 million 7% senior unsecured notes due in 2022, which are also rated BB-.

The proceeds will be used to refinance its outstanding $250 million 7% senior unsecured notes, which are due in 2019, the agency said.

Lippo has significant flexibility to defer its capital expenditure during times of weak presales, which supports its ratings, Fitch said.

The company has significantly curtailed its capital expenditure this year to about Rp 3.3 trillion, which is less than half of its initial budget, the agency said.

This allows Lippo to conserve its cash flows and manage its leverage within its rating parameters in 2016, Fitch explained.

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