Moody's affirms Pakuwon Jati

Moody's Investors Service said it affirmed its B2 corporate family rating for Indonesia-based PT Pakuwon Jati, Tbk. and its B2 senior secured rating for Pakuwon Jati Finance BV following the completion of the company's $110 million bond issuance.

The bonds are guaranteed by Pakuwon and by PT Artisan Wahyu, which will become Pakuwon's subsidiary upon the completion of the acquisition of newly issued shares from Artisan Wahyu.

The outlook is stable.

The reduction in the size of the bond issuance to $110 million from $120 million will have limited impact on Pakuwon's financial profile, Moody's said. Proceeds will be used to acquire equity interest in Artisan Wahyu and to partly repay certain existing debts.

Moody's said the terms of the bonds have been tightened to include first-priority security rights over Tunjungan Plaza I and Tunjungan Plaza III developments in Surabaya, Indonesia. The offshore and onshore operating accounts of Artisan Wahyu, which receive proceeds from strata sales and retail rentals also will be pledged. It is Moody's view that these changes will provide stronger scrutiny over cash usage.

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