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June 19 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has set level of debt letter U.S. dollar due 2019 to be issued by PT Pakuwon Jati Tbk (Pakuwon) at 'B + (EXP), the Recovery Rating' RR4 '. At the same time, Fitch also publishes Level Term Foreign Currency Long ISSUER Default Rating (IDR) and Senior Level Points Unsecured Foreign Currency at 'B +'. Outlook is Stable for Level Term Term Foreign Currency IDR.
The new bonds will be issued by Pakuwon Prima Pte Ltd and guaranteed by Pakuwon and certain of its subsidiaries. Final rating is dependent on the receipt of final documents in accordance with the information already received. Debt securities rated at the same level as the Senior Traveller Without Pakuwon collateral because it is a direct obligation, without conditions, without warranty, and no subordinate of the company.
Factors Stage Actuator
Support From Property Investment Portfolio: Pakuwon is a property developer diversified. Company's property portfolio consists of retail, residential, commercial, and hotel. Rating reflects the company's solid investment properties that contribute to 48% of the total revenue in 2013. Additionally, 42% of the company's revenue derived from mall and office operating leases that have a long-term lease profile.
The investment property generating solid recurring EBITDA amounted to EUR 778milyar (USD 67juta) and recurring ETBIDA / interest coverage of 3.8 x, in conjunction with the company's strong liquidity will help manage siklikalitas and volatility of the property development business.
Qualified Assets: Portfolio investments of companies spread across 4 projects already operating at strategic locations in Jakarta and Surabaya. project The main property consists of a multi-function development (apartments, offices, malls and sometimes the hotel). Mall of Pakuwon addition to generating recurring revenue stable is the center of the land company in Jakarta and Surabaya will attract residents and office tenants and also the main place serving the local community. The company has a strong track record in managing the rental rate of the mall and is consistently achieving rental levels above the industry average.
Margin Height: Fitch estimates that would generate a margin Pakuwon EBITDA above 50% in the medium term, supported by inexpensive land costs and the company's ability to generate value in the super block them. Pakuwon recorded EBITDA margin of 53% in 2013 (2012: 55.6%), more higher than the company's other properties are rated as PT Alam Sutera Realty Tbk (B + / Stable) by 42% and PT Lippo Karawaci Tbk (BB-/Stabil) with 27%. Fitch believes that the high margins will provide the company flexibility in the adjustment of the price at the time the property market decline.
Limited Scale and Diversification: rating Pakuwon limited by limited scale and diversification projects. Fitch estimates that the medium term, the company will generate most of its cash flow of the superblock are already in operation. Based on the current level of development, a land area of 394 hectares of the company will be sufficient for the development during more than 10 years. Although the company will launch a new residential project in West Surabaya in 2H14, Fitch believes that the cash flow of the project and still less diversified company than the company have a higher ranking.
Ranking of positive action is not anticipated within medium because of the limited scale of the project, and the diversification of cash flows company.
Negative: future developments that may, individually or lowering the collective inter alia:
- Weakening recurring EBITDA of investment property (IP) / interest in sustained below 2.5x
- Net debt / net inventory (net inventory = IP + Inventory + Property and Equipment
- Advances) rose above 50% on an ongoing basis
- Weakening business profile as evidenced by a significant increase of vacancy rates or sustained weakening rental rates
- Evidence of weakening liquidity