S&P lifts Pakuwon Jati

S&P said it raised the long-term issuer credit rating on PT Pakuwon Jati Tbk. to BB from BB-.

The agency also said raised the long-term issue rating on the senior unsecured notes that Pakuwon guarantees to BB from BB-.

The outlook is stable.

S&P said it raised the rating because it believes Pakuwon's leverage will gradually improve over the next two years, owing to the company's steady growth in property sales, increasing recurring income, manageable capital spending and stable debt balance.

The agency also said it expects Pakuwon's financial stability and debt-servicing capability to materially improve as the company ramps up its investment property portfolio.

S&P said it estimates that Pakuwon's EBITDA interest coverage will improve to 7x to 7.5x over the next two years, from 6.1x in 2017.

The agency also said it expects Pakuwon to maintain financial discipline as it continues to pursue growth.

The company has a record of maintaining moderate leverage while executing its growth strategy over the industry cycle, S&P said.

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