S&P cuts Arpeni Pratama

Standard & Poor's said it lowered its corporate credit rating on PT Arpeni Pratama Ocean Line Tbk to selective default (SD) from CC, and affirmed its outstanding $140.85 million senior secured notes issued by Arpeni Pratama Ocean Line Investment BV due May 3, 2013 at C following the missed payment of its coupon in May. It has a 30-day grace period to pay the coupon.

Although the company has said it plans to keep on making interest payments, the deferral is part of Arpeni's steps in trying to manage its cash, liquidity and working capital positions, S&P said.

This deferral exposes Arpeni to possible repayment acceleration of its debts if cross-default provisions are triggered - a situation compounded by the efforts to unwind some derivative transactions, the agency said.

Arpeni's liquidity was increasingly stressed throughout 2009, S&P added.

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