Moody's downgrades Agung Podomoro

Moody's Investors Service said it downgraded the corporate family rating of PT Agung Podomoro Land Tbk. to B1 from Ba3.

Moody's also said it downgraded the backed senior unsecured rating of the bonds issued by APL Realty Holdings Pte. Ltd., a wholly owned subsidiary of Agung Podomoro, to B1 from Ba3.

The bonds are guaranteed by Agung Podomoro and some of its subsidiaries.

The outlook is stable.

The downgrades reflect an expectation that Agung Podomoro's credit metrics will weaken to levels no longer consistent with a Ba3 rating because of its low levels of marketing sales, Moody's said.

A greater proportion of its cash flows over the next 12- to 18-months will come from one-off block sales, a characteristic that is more in line with single B-rated property developers, the agency said.

Agung Podomoro is expected to continue generating predictable recurring cash flow sufficient to cover 0.9x to 1x of adjusted interest expenses in 2018 and 2019, Moody's said.

The ratings also reflect the company's established position as one of the largest property developers in Indonesia, the agency said.

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