Moody’s downgrades Modernland

Moody’s Investors Service has downgraded the corporate family rating of Modernland Realty Tbk. to Ca from Caa1.

At the same time, Moody’s lowered the backed senior unsecured rating of the 2021 notes issued by JGC Ventures Pte. Ltd. and the 2024 notes issued by Modernland Overseas Pte. Ltd. to Ca from Caa1. Both JGC companies are wholly owned subsidiaries of Modernland. Modernland and most of its subsidiaries guarantee their notes.

Modernland postponed the principal payment of its Rp 150 billion bond due July 7. The company will meet with bondholders on July 14, with one of the agenda items being the change of the bond’s principal repayment date.

“The downgrade of Modernland’s ratings reflects our expectation of a high likelihood of imminent default, including a potential debt restructuring, because of a deterioration in the company’s operating cash flow generation and liquidity,” said Jacintha Poh, a Moody’s vice president and senior credit officer, in a press release.

The outlook is negative.

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