Moody's lowers Mobile-8

Moody's Investors Service said it downgraded to Caa2 from Caa1 the corporate family rating of PT Mobile-8 Telecom Tbk and the senior unsecured rating on the $100 million 11¼% notes due 2013 issued by Mobile-8 Telecom Finance Co. BV. The ratings also remain on review for possible downgrade.

The downgrade follows PT Global Mediacom Tbk's sale of a 32% equity stake in Mobile-8 to Jerash Investments, a Middle Eastern private equity investor, the agency said.

Following this sale, Global Mediacom's ownership in Mobile-8 has fallen to below 51%, triggering the change of control clause under its $100 million notes indenture, Moody's said. The subsequent acceleration of the repayment the notes will further pressure the liquidity profile of the company, the agency said.

According to Mobile-8's notes indenture, the company must make an offer to purchase all the outstanding notes at a purchase price equal to 101% plus any accrued unpaid interest within 30 days of the change of control event, the agency said. A failure to do so would result in an event of default, Moody's said, and could trigger a cross-default on its Rp 676 billion bonds at the option of the bondholders.

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