Fitch lowers PP Properti view to negative

Fitch Ratings said it revised the outlook on PT PP Properti Tbk to negative from stable and affirmed the national long-term rating at BBB+(idn).

The agency also said it affirmed the national long-term rating of BBB+(idn) on the company's Rp 2 trillion senior unsecured bond program and Rp 600 billion medium-term notes issued under the program.

The outlook revision reflects the company's considerably weaker cash collections from property presales in 2018, Fitch said, and a view that its strategy to improve cash collections comes with significant risks in the next two years.

The ratings also consider the company's adequate liquidity in terms of cash on hand and available undrawn credit lines, plus the adequate land bank across many of its key projects through which it plans to drive sales in the medium term, Fitch said.

This provides the flexibility to slow down temporarily on land purchases to match cash inflows, the agency said.

Fitch said it expects PP Properti's cash collections to remain weak in the next two years.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.