Fitch cuts Pakuwon Jati

Fitch Ratings said it downgraded PT Pakuwon Jati Tbk.'s long-term foreign- and local-currency issuer default ratings to RD from C and national long-term rating to RD(idn) from C(idn), along with the $110 million senior notes due 2011 to RD/RR4 from C/RR4 and senior bond I due 2011 to RD(idn) from C(idn).

The downgrades follow news that the company completed its debt exchange offer for the 2011 notes, Fitch said.

The exchange offer is considered a coercive debt exchange under the agency's criteria for two main reasons. Firstly, there is a material reduction of contractual terms, compared with the original terms of the 2011 notes. Secondly, Fitch said it believes that in the absence of the exchange offer, a payment default would have been likely.

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