S&P cuts Jababeka

S&P said it cut its ratings for Kawasan Industri Jababeka Tbk. to SD, selective default, from CC and its guaranteed 2023 notes to D from CC.

“The downgrade follows Jababeka's announcement of the completion of an exchange offer for its $300 million notes due in October 2023. Post the transaction, the company will have new senior secured $186 million notes due in 2027, about $34 million of old notes due in 2023, and a $100 million loan from PT Bank Mandiri. We expect Jababeka to repay the residual old notes at par before maturity using internal accruals and the remaining $20 million from the Bank Mandiri loan,” S&P said in a press release.

The agency noted it considers the exchange distressed or equivalent to default because the participating bondholders will get less than they were originally promised.

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