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Lippo Karawaci was downgraded to CCC+ from B- by Fitch. Fitch also downgraded the ratings of its 8.125% 2025s and 6.75% 2026s to CCC+ from B-. The rating action reflects the heightened refinancing risk of Lippo’s dollar bonds due to prioritization of refinancing efforts by the company of Lippo Malls Indonesia Retail Trust’s (LMIRT) 7.25% 2024s, which could complicate banking relationships and delay its own debt refinancing. According to Fitch, both Lippo Karawaci and LMIRT’s access to the dollar market will continue to remain weak amid soft demand for HY bonds. Also, Fitch expects Lippo Karawaci’s free cash flows to remain negative, at around IDR 700-750bn ($45-49mn) in 2023 as its capital structure continues to exceed the cash generative properties of the business.
Lippo Karawaci’s dollar bonds remained flat with its 8.125% 2025s, trading at 86.9 cents on the dollar, yielding 21.4%