Moody’s ups Alam Synergy notes

Moody’s Investors Service said it upgraded the backed senior unsecured ratings of the 2021 notes and 2022 notes issued by Alam Synergy Pte. Ltd., a wholly-owned subsidiary of Alam Sutera Realty Tbk. to Caa2 from Caa3. The notes are guaranteed by Alam Sutera and most of its subsidiaries.

The agency also assigned a Caa1 definitive rating to the 2024 and 2025 senior secured notes to be issued by Alam Sutera for a debt exchange. The notes are guaranteed by most of Alam Sutera subsidiaries and will be secured by a mortgage over the Mall@Alam Sutera land lot and a commercial land lot. The new senior secured notes are rated in line with Alam Sutera’s Caa1 corporate family rating. In contrast, the outstanding 2021 and 2022 senior unsecured bonds are rated one notch lower at Caa2 to reflect legal subordination risk, Moody’s said.

Moody’s changed the outlook for both companies to negative from under review and affirmed Alam Sutera’s Caa1 corporate family rating.

“The outlook is negative because further down the line, the refinancing risk on Alam Sutera’s 2022 notes has not been eliminated. Although the amount outstanding is small at around $46.58 million, we expect the company to depend on external funding because it will not generate sufficient operating cash flow to address the risk,” said Jacintha Poh, a Moody’s vice president and senior credit officer, in a press release.

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