Dec 9, 2010

Pefindo upgrades Malindo bond to AA+

Local rating agency PT Pemeringkat Efek Indonesia (Pefindo) has upgraded rating of bond I/2008 issued by PT Malindo Feedmill Tbk worth IDR300 billion to AA+ from AA-.
In an official statement last night, the rating upgrade is an impact of guarantee of PT Bank CIMB Niaga Tbk providing unconditional and irrevocable standby letter of credit.
"Bank Niaga acts as 100% guarantor of bond principal and maximum 2 folds of interest payment," said Pefindo analyst Doni Kuswantoro said.
About 34% of the bond proceed maturing on March 2013 has been used by Malindo to acquire PT Leong Ayamsatu Primadona, affiliated company.
Malindo has utilized 18% of the proceed to support working capital and the remaining will be used to build a new plant at Cikande, Banten, scheduled to operate commercially next year.
Doni said the rating upgrade is also underpinned by CIMB Niaga rating, the fifth largest bank by asset with AA+ rating with stable outlook.

Disclosure: No position at the stock mentioned above.
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