Fitch assigns Alam Sutera notes B+

Fitch Ratings said it assigned PT Alam Sutera Realty Tbk.'s (B+/stable) proposed senior unsecured U.S. dollar-denominated notes an expected B+(EXP) rating, with a recovery rating of RR4.

The proposed notes are to be issued by Alam Synergy Pte Ltd and guaranteed by Alam Sutera and certain subsidiaries.

The company plans to use part of the bond proceeds to repurchase bonds due in 2017 and the rest for project development and general corporate purposes.

Fitch said the ratings reflect Alam Sutera's small scale, project concentration and inherent volatility in the property developments. Historically, more than 50% of marketing sales derived from Alam Sutera's matured township in Serpong, a satellite city in the western part of Greater Jakarta.

Fitch expects the company to gradually achieve a more diversified project mix as Alam Sutera's second township project at Pasar Kemis develops. Management estimates Pasar Kemis will account for about 43% of total marketing sales in 2013 (2012: 18%).

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