TEXT-Fitch assigns Pt Lippo Karawaci Tbk's notes final 'BB-' rtg

Thu Jan 17, 2013 3:11am EST

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(The following statement was released by the rating agency)

Jan 17 - Fitch Ratings has assigned Indonesia-based PT Lippo Karawaci Tbk's (LK, 'BB-'/Stable) USD130m 6.125% notes due 2020 final 'BB-' ratings. The new notes, issued by Theta Capital Pte. Ltd., are guaranteed by LK.

The rating action follows the receipt of documents conforming to information already received. The final rating is in line with the expected rating assigned on 7 January 2013. The USD130m bonds are issued as a tap to the existing USD273.306m 6.125% notes due 2020.

LK plans to use the issue proceeds to refinance its 9% notes falling due in 2015. This tap issue will not result in an increase in LK's net debt and therefore will not impair its current financial profile. LK's ratings are supported by Indonesia's favourable long-term demand for residential properties and healthcare services, a continued strong recurring income base, and LK's demonstrated track record in managing these businesses.

What Could Trigger a Rating Action?

Negative: Future developments that may, individually or collectively, lead to a negative rating action include:

- Recurring EBITDA interest cover falling below 1.5x

- Recurring EBITDA fixed-charge cover falling below 1.25x

- Failure to pre-fund projected capex

Positive: Not foreseen in the medium term due to LK's high operating exposure to the cyclical real estate sector.

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