Fitch: Alam Sutera notes B+

Fitch Ratings said it assigned an expected B+ rating with recovery rating of RR4 to PT Alam Sutera Realty Tbk.'s proposed dollar-denominated senior unsecured notes due in 2022.

The notes will be issued by the company's wholly owned subsidiary Alam Synergy Pte Ltd. and guaranteed by Alam Sutera and its subsidiaries, Fitch said.

The notes are rated at the same level as the company’s senior unsecured rating as they represent the company's unconditional, unsecured and unsubordinated obligations, the agency said.

Alam Sutera intends to use the proceeds of the proposed notes to buy back its existing $225 million 9% senior unsecured notes, which are due in 2019, Fitch said.

A successful issuance of the proposed notes will push back the company’s earliest significant debt maturity to 2020 when its $235 million 6.95% senior unsecured notes are due, the agency explained.

The negative outlook reflects the potential challenges that the company faces in improving contracted sales, Fitch said.

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