Moody's affirms Gajah Tunggal

Moody's Investors Service said it has confirmed PT Gajah Tunggal Tbk's B3 corporate family and senior secured ratings.

The outlook is stable.

This closes the review action initiated on July 08, following publicity surrounding an alleged claim of covenant breach by an anonymous bondholder, the agency said.

Moody's noted that the situation arose after the payment of a dividend to shareholders, which could potentially be construed as being in contravention of the terms of Gajah Tunggal's restructured bonds.

In Moody's view, the risk of an event of default being called on the basis of the dividend payments between now and the bond's maturity in July 2014 is remote. However, the decision to pay dividends before the bond's coupon returned to 10.25% is, in Moody's view, a clear instance of management passing some of the interest, surrendered by bondholders in 2009, to shareholders.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.