Fitch lowers Lippo Malls Indonesia

Fitch Ratings said it downgraded Lippo Malls Indonesia Retail Trust's long-term issuer default rating to CCC+ from B-. Fitch also lowered the rating on LMIRT's senior unsecured notes due 2024 and 2026 to CCC+ from B- with the recovery rating remaining at RR4. The notes were issued by its wholly owned subsidiary, LMIRT Capital Pte. Ltd., and are guaranteed by Perpetual (Asia) Ltd., in its capacity as trustee of LMIRT.

“The downgrade reflects the heightened risk LMIRT faces in refinancing large upcoming debt maturities amid unfavorable debt capital market conditions and weakening investor sentiment. The trust will need external financing to meet a substantial part of the S$580 million, or two-thirds of debt, maturing over the next 16 months. LMIRT's large unencumbered pool of assets may aid refinancing, but there are significant execution risks in moving to a secured-capital structure,” the agency said in a statement.

Fitch noted key maturities are a S$135 million bank loan due in November, S$82.5 million of bank loans due in January 2024 and a $250 million medium-term note due in June 2024.

The outlook before the downgrade was negative. Fitch said it usually does not assign outlooks to issuers with a rating in the CCC category.

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