Fitch changes Modernland to stable

Fitch Ratings said it revised PT Modernland Realty Tbk.'s outlook to stable from negative and affirmed the long-term foreign-currency issuer default rating at B.

Fitch said the outlook revision reflects the significant improvement in the company's presales, which may result in higher EBITDA recognition, and the subsequent reduction in the risk of the company breaching its local-currency debt covenants in 2017.

In the first quarter of 2017, Modernland booked presales of over Rp 600 billion, more than three times the 2016 first-quarter presales of around Rp 200 billion.

In the agency’s view, the company's strategy of selling land in bulk has been successful in managing its liquidity during the challenging property market and reinforces its track record in such sales.

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