Fitch rates Jababeka notes B

Fitch Ratings said it assigned a final B rating to PT Kawasan Industri Jababeka Tbk.'s (Jababeka) proposed five-year senior unsecured notes.

The amendments to the key terms and conditions of the senior unsecured notes, mainly the inclusion of a repayment schedule, additional financial covenant and changes in permitted indebtedness, did not materially impact projected cash flows to service the senior unsecured notes, Fitch said.

The final rating is in line with the expected rating assigned July 10, the agency said.

The company's B issuer default rating reflects the high quality of its development with the provision of ancillary facilities, Fitch said, and its land bank that is adequate for five years of development at the current pace of sales.

The proposed bond issue will significantly improve Jababeka's debt maturity profile, the agency added.

These positives are counterbalanced by Jababeka's small size, concentration risk arising from its Cikarang estate contributing to bulk of its sales and the inherent cyclicality of property development, Fitch said.

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