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Moody's snips Lippo Malls Indonesia
Moody's Investors Service said it lowered the corporate family rating of Lippo Malls Indonesia Retail Trust (LMIRT) to B2 from B1. Moody's also snipped the backed senior unsecured rating on the bonds issued by LMIRT Capital Pte. Ltd., a wholly-owned subsidiary of LMIRT, to B2 from B1. The bonds are guaranteed by the trustee of LMIRT.
"The downgrade reflects our expectations that LMIRT's credit metrics will remain weak despite improving operating environment in Indonesia as restrictions ease. Rising interest rates also heighten risks that the trust's interest coverage will further weaken given its high proportion of floating-rate debt," said Rachel Chua, a Moody's vice president and senior analyst, in a press release.
"The downgrade also reflects the trust's weakening financial policy as demonstrated by its increasing proportion of floating-rate debt over the past three years, as well as the limited headroom under its regulatory leverage ratio to accommodate a decline in asset value," said Chua, who is also Moody's lead analyst for LMIRT.
The outlook remains negative.
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