Fitch Ratings has today downgraded PT Pakuwon Jati Tbk's long-term foreign and local currency Issuer Default Ratings (IDRs) to RD from C and National Long-term rating to RD(idn) from C(idn).
The agency has also downgraded the USD110m senior notes due 2011 to RD/RR4 from C/RR4 and Senior Bond I (outstanding IDR38.5bn) due 2011 to RD(idn) from C(idn).
The downgrades follow the company's announcement of the completion of its debt exchange offer for the 2011 Notes. Under the Exchange Offer, 76.14% of noteholders that validly tendered received 60% of the outstanding principal as cash upfront with the remaining 40% was exchanged into US$ step-up cash Coupons and Paid in Kind interest unsecured senior notes due in 2015 (2015 Notes).
The exchange offer is considered a Coercive Debt Exchange (CDE) under Fitch's CDE criteria for two main reasons. Firstly, there is a material reduction of contractual terms, compared with the original terms of the 2011 Notes, including the significant extension of the maturity date, the structural reduction in seniority of the 2015 Notes and the change from cash pay basis to the combination of step up cash and paid-in-kind basis for the coupons. Secondly, Fitch believes that in the absence of the Exchange Offer, a payment default would have been likely.
The exchange offer is considered a Coercive Debt Exchange (CDE) under Fitch's CDE criteria for two main reasons. Firstly, there is a material reduction of contractual terms, compared with the original terms of the 2011 Notes, including the significant extension of the maturity date, the structural reduction in seniority of the 2015 Notes and the change from cash pay basis to the combination of step up cash and paid-in-kind basis for the coupons. Secondly, Fitch believes that in the absence of the Exchange Offer, a payment default would have been likely.
Fitch will reassess the company's credit profile based on its revised capital structure 30 days after the completion of the Exchange Offer.
No comments:
Post a Comment