S&P affirms PT Chandra Asri

Standard & Poor's said it affirmed the B+ long-term corporate credit rating on PT Chandra Asri and the B+ foreign-currency issue rating on the proposed senior secured notes to be issued by Altus Capital Pte. Ltd. and guaranteed by Chandra Asri.

These notes were scheduled for launch in the fourth quarter of 2009 but were postponed because of the market conditions prevailing at the time.

The outlook is stable.

Proceeds will be used to repay in full the outstanding amount on an existing term loan facility, without the company incurring any prepayment penalty. Any remaining amount is expected to be used to repay a subordinated loan provided by a former shareholder, Strategic Investment Holdings Ltd.

"The affirmed rating on Chandra Asri reflects the company's cyclical commodity chemicals business, exposure to rising feedstock costs and limited product and operational diversity," S&P analyst Allan Redimerio said in a statement.

"These risks are partially offset by the company's entrenched market position in Indonesia, its favorable domestic demand, cost advantages from its domestic vertically integrated facilities and moderate leverage."

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