S&P slices Kawasan Industri Jababeka

S&P said it lowered its ratings for Kawasan Industri Jababeka Tbk. and its $300 million of notes to CCC from B-. The agency also removed the ratings from CreditWatch, where they were placed with negative implications on June 10 and assigned a negative outlook.

“We lowered the ratings on Jababeka because we believe the refinancing risk for the company's U.S. dollar-denominated notes due October 2023 has risen. The company has made slow progress on securing funding as credit market conditions remain weak. This is despite the notes' maturity being less than 14 months away. With refinancing options reducing, we see an increased likelihood that the company will pursue a distressed capital market transaction,” the agency said in a press release.

S&P noted Jababeka is still in talks with banks for a $100 million term loan commitment but had expected the company to seal the commitment last month. The remaining $200 million is expected to be provided through the sale of new notes.

Jababeka’s U.S. dollar notes are trading at below 50% of face value currently, compared with about 70% two months ago.

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