Fitch rates Multipolar A(idn)

Fitch Ratings said it affirmed PT Multipolar Tbk.’s long-term issuer default rating at B+, along with the senior unsecured rating at B+ and $230 million notes due in 2018 at B+ with recovery rating of RR4.

The notes are issued by Pacific Emerald Pte Ltd., a wholly owned subsidiary, and guaranteed by Multipolar and certain subsidiaries, Fitch said.

Fitch also said it assigned a national long-term rating of A(idn) to Multipolar.

The outlook is stable.

Multipolar’s ratings reflect the subordination of its cash flows due to its holding company structure. Most of its cash flows are from dividends from 50.2%-owned hypermarket operator PT Matahari Putra Prima Tbk. and 20.5%-owned PT Matahari Department Store Tbk., the agency said.

Therefore, Multipolar’s ability to meet its debt obligations depends on dividends from both of its owners, Fitch said.

The agency said it believes Matahari Putra and Matahari Department Store will continue to be able to pay Multipolar dividends over the medium term, driven by both companies’ favorable operating performance and strong financial profile.

Multipolar’s overall credit profile remains consistent with the current rating because the weaker fixed-charge cover is mitigated by its parent companies’ strong operating and financial profile, well-distributed debt maturity and access to cash at other fully owned entities, Fitch added.

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