Mobile-8 Default ??

Moody's Investors Service has downgraded to Ca from Caa2 PT Mobile-8 Telecom Tbk's ("Mobile-8") corporate family rating and the senior unsecured rating on the US$100 million 11.25%notes due 2013 issued by Mobile-8 Telecom Finance Company B.V.. The outlook on the ratings is negative.
The ratings downgrade follows the company's announcement that the holders of the US$ notes have rejected a proposed debt restructuring, and requested accelerated repayments on the US$100 million principal and unpaid interest no later than 14 business days after 26 November 2008.
The request for accelerated repayments follows the company's failure to launch a tender offer to redeem the US$ notes within 30 days of the Change of Control event, therefore triggering an event of default under the notes indenture. "The downgrade to Ca reflects the fact that Mobile-8's current liquidity sources are not sufficient to cover early repayment of the notes and therefore a default on the notes after the grace period looks unavoidable" says Ivan Palacios, a Moody's AVP/Analyst. "Furthermore, a default on the company's US$ notes could trigger a cross-default on its Rupiah senior secured notes, at the option of the bondholders."