Moody's downgraded PT MNC Investama Tbk's corporate family rating to Caa3 from Caa2, with a negative outlook.
The rating agency said Aug. 8 that the downgrade reflects the significant level of refinancing risk over the next 12 months and the increasing likelihood of a debt restructuring exercise being required.
MNC Investama's consolidated short-term debt and current long-term outstanding debt totaled 5.9 trillion Indonesian rupiah as of June 30, Moody's noted. It added that the company's US$365 million 5.875% senior secured notes will mature in May 2018.
The lack of specific details regarding refinancing plans to address upcoming maturities exposes MNC Investama to material refinancing risk and market risk, said Annalisa DiChiara, a vice president and senior credit officer at Moody's.
The negative outlook reflects the likelihood that the risk of default will continue to intensify through May 2018.
The rating agency said an upgrade of MNC Investama's ratings is unlikely unless it refinances its upcoming bank and bond maturities in a timely manner and without any significant increase in interest costs, resulting in an improved capital structure, with adequate liquidity.
As of Aug. 8, US$1 was equivalent to 13,313.00 Indonesian rupiah.