(The following statement was released by the rating agency)
March 14 -
Summary analysis -- PT Alam Sutera Realty Tbk. -------------------- 14-Mar-2012
CREDIT RATING: B/Stable/-- Country: Indonesia
Credit Rating History:
Local currency Foreign currency
12-Mar-2012 B/-- B/--
On March 13, 2012, Standard & Poor's Ratings Services assigned its 'B' long-term corporate credit rating and 'axBB-' ASEAN scale rating to Indonesia-based real estate developer PT Alam Sutera Realty Tbk. The outlook is stable. At the same time, we assigned a 'B' issue rating on the proposed issue of senior unsecured notes by Alam Sutera International Pte. Ltd., a special purpose vehicle set up to issue the notes. PT Alam Sutera's subsidiaries guarantee the notes. The issue rating is subject to our review of the final documents.
The rating on Alam Sutera reflects the company's aggressive debt-funded expansion, small scale and high project concentration, and execution risks for its investments in a proposed hospitality venture in Bali, Indonesia. The company's large, low-cost, and well-located land bank, good growth potential of the Indonesian property market, and a track record of developing the Alam Sutera township in Indonesia temper these weaknesses.