Research Update: PT Kawasan Industri Jababeka Tbk. Downgraded To 'B' On Weak Operating Performance; Outlook Stable

We forecast that KIJA's leverage over the next two years will remain higher than our previous estimate, given the company's lower-than-expected EBITDA and higher-than-anticipated debt in 2017. We also expect KIJA's cash flow adequacy to be weak through 2019 amid still subdued property sales and marginal operating cash flows. We are lowering our long-term issuer credit rating on KIJA to 'B' from 'B+'. At the same time, we are lowering the issue rating on the Indonesian property developer's guaranteed outstanding senior unsecured note to 'B' from 'B+'. The stable outlook reflects our view that KIJA's interest coverage will stabilize at lower levels but remain above 1.5x over the next 12-18 months. On April 30, 2018, S&P Global Ratings lowered its

...+ We forecast that KIJA's leverage over the next two years will remain higher than our previous estimate, given the company's lower-than-expected EBITDA and higher-than-anticipated debt in 2017. + We also expect KIJA's cash flow adequacy to be weak through 2019 amid still subdued property sales and marginal operating cash flows. + We are lowering our long-term issuer credit rating on KIJA to 'B' from 'B+'. At the same time, we are lowering the issue rating on the Indonesian property developer's guaranteed outstanding senior unsecured note to 'B' from 'B+'. + The stable outlook reflects our view that KIJA's interest coverage will stabilize at lower levels but remain above 1.5x over the next 12-18 months....

Research Update