Fitch downgrades APLN

Fitch Ratings said it downgraded PT Agung Podomoro Land Tbk.'s (APLN) long-term issuer default rating to C from CCC-. The agency also lowered the rating on APLN's outstanding $132 million of 5.95% notes due June 2024 to C from CCC- with an RR4 recovery rating. The notes were issued by wholly owned subsidiary, APL Realty Holdings Pte. Ltd., and are guaranteed by APLN and several of its subsidiaries.

“The downgrade follows APLN's Nov. 15 announcement of a proposed tender offer to buy back part of its $132 million of unsecured notes due on June 2, 2024, which we consider to be a distressed debt exchange (DDE). This is because the proposed buyback will materially reduce the original terms to noteholders and we believe the transaction is being conducted to avoid a default, given APLN's untenable liquidity,” Fitch said in a press release.

However, even if the offer is successful, Fitch said the exchange would diminish but not eliminate its refinancing risk in the next 12-18 months.

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