Fitch cuts Lippo Malls

Fitch Ratings said it downgraded its ratings for Lippo Malls Indonesia Retail Trust and its senior unsecured notes due 2024 and 2026 to C from CCC-. The recovery rating remains RR4 on the notes that were issued by LMIRT subsidiary LMIRT Capital Pte. Ltd., and are guaranteed by Perpetual (Asia) Ltd. in its capacity as trustee of LMIRT.

The agency also removed all ratings have been removed from rating watch negative, on which they were placed on Dec. 14.

The downgrade follows LMIRT saying it will proceed with its tender offer, which Fitch said it considers a distressed debt exchange.

On Thursday, LMIRT said it received valid tenders on $43.5 million of notes due 2024, or 18.8% of outstanding notes, and $38.5 million of notes due 2026, or 21.2% of outstanding notes. It also obtained valid consents to remove material covenants on no less than a majority in aggregate principal amount of the notes due 2024 and 2026.

“We regard LMIRT's tender offer as a DDE, as we believe the amendments constitute a material reduction in original terms and that the transaction helped the company to avoid a traditional default, given its untenable liquidity profile,” Fitch said in a press release.

The agency said it will downgrade LMIRT to RD, or restricted default, once the exchange is completed and then re-evaluate its capital structure.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.