Fitch ups, rates Jababeka notes CCC+

Fitch Ratings said it upgraded Kawasan Industri Jababeka Tbk.’s remaining senior unsecured notes of up to $34.5 million due Oct. 5, 2023 to CCC+ from C and assigned a CCC+ rating to the issuer’s new $185.9 million of secured notes due Dec. 15, 2027. The recovery rating for both series of notes is RR4.

The new 2027 secured notes were issued by KIJA and are guaranteed by certain subsidiaries. The notes are secured by first-ranking mortgages over land parcels of not less than 300 hectares. The remaining 2023 notes are issued by KIJA's wholly owned subsidiary, Jababeka International BV, and are guaranteed by KIJA and certain subsidiaries.

The rating actions are concurrent with the agency’s downgrade of the issuer to RD, restricted default, from C and then the upgrade to CCC+. The upgrade follows KJIA completing its reported bond exchange that Fitch said it considered a default. For more details on the exchange, see Prospect News’ Dec. 8 story.

The CCC+ rating reflects KJIA’s improved liquidity following the exchange “We believe cash on hand and our expectation of neutral free cash flow (FCF) should be sufficient to meet obligations in the next 12-18 months,” Fitch said in a press release.

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