On Feb 10, Moody’s Investors Service downgraded Lippo Malls Indonesia Retail Trust (LMIRT) to Caa1 from B3.
"The downgrade reflects our view that debt restructuring is likely to take place over the next 6 -12 months as the trust has no concrete refinancing plans for its bank loan maturities due November 2023 and January 2024, as well as its US dollar bond that will mature in June 2024 amid a tight funding environment," says Rachel Chua, a Moody's Vice President and Senior Analyst.
"The downgrade also captures our expectation that LMIRT will trip its bank loan covenants and trigger a cross default on its US dollar bonds in the event of a depreciation of the Indonesian rupiah against the Singapore dollar which will result in its regulatory leverage exceeding 45%," says Chua, who is also Moody's lead analyst for LMIRT.
