Fitch cuts Pakuwon Jati notes to B-

Fitch Ratings said it downgraded PT Pakuwon Jati Tbk's foreign-currency and local-currency issuer default ratings to B- from B, national long-term rating to BB(idn) from BBB-(idn) and placed all ratings on rating watch negative. The rating on the $110 million senior notes due 2011, issued by Pakuwon Jati Finance BV and guaranteed by Pakuwon and its subsidiaries, has been downgraded to B- from B and placed on rating watch negative. The notes recovery rating is affirmed at 4. Fitch also said it downgraded Pakuwon's senior bond I due in 2011 (outstanding Rp74.1 billion) to BB(idn) from BBB-(idn) and placed it on rating watch negative.

The downgrade reflects a significant delay in the completion of the development of Superblock Gandaria, a mixed-use development in Jakarta that has achieved weak pre-sale rates to date, Fitch said.

The company's liability also is increasing due to the Indonesian rupiah's continued depreciation against the dollar because the bulk of its debt is dollar-denominated while its income sources are primarily in rupiah, the agency said.

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