S&P: Lippo Karawaci notes BB-

Standard & Poor's said it assigned a BB- rating to the proposed issue of up to $150 million senior notes guaranteed by PT Lippo Karawaci Tbk. and some of its subsidiaries.

Theta Capital Pte. Ltd., a special purpose vehicle that Lippo Karawaci owns, will issue the notes, which are due in 2019.

The rating on the proposed notes is the same as the rating on Lippo Karawaci's existing senior notes due in 2015.

The proceeds will be used to finance retail malls, hospitals, property development, working capital requirements and general corporate purposes.

The company's corporate credit rating is not affected by the proposed issue. While the proposed issue will raise Lippo Karawaci's debt to a level higher than anticipated, the agency said it expects the company's operating performance to remain strong in the next 12 to 18 months.

Operating performance was significantly better than expected in 2011. Strong economic growth in Indonesia has culminated in robust demand for the company's properties and health care services, S&P said, and increased occupancy at its hotels and shopping malls.

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