S&P trims Modernland notes

S&P said it downgraded PT Modernland Realty Tbk.’s guaranteed senior unsecured notes to CC from CCC-. The agency removed the ratings from CreditWatch, where they were placed on July 2. The long-term issuer credit rating on Modernland remains at SD (selective default).

S&P lowered the rating to reflect its view of a virtual certainty Modernland will miss coupon payment due Aug. 30 on its U.S. dollar notes.

“We see a strong likelihood of a restructuring of Modernland's outstanding U.S. dollar notes. We could deem that as a distressed exchange considering the company's depleted liquidity and the recent restructuring of its Indonesian rupiah (Rp) 150 billion domestic notes. Modernland failed to repay the domestic notes upon their maturity on July 7, 2020. Furthermore, the company is yet to demonstrate any meaningful refinancing progress and flexibility to find alternative funding options,” the agency said in a press release.

Modernland met with holders of the dollar-denominated notes Wednesday to discuss the process and timetable for restructuring the notes, S&P said.

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