Mar 10, 2012

Davomas rating placed on credit watch

Standard & Poor's Ratings Services (S&P) said today that it had placed its 'CCC+' long-term corporate credit rating on cocoa producer PT Davomas Abadi Tbk (DAVO) on credit watch with negative implications. The rating agency also placed the 'CCC+' issue rating on the senior secured notes due 2014 that Davomas guarantees on credit watch with negative implications.
Davomas International Finance Co. Ltd., a wholly owned subsidiary of Davomas, issued the notes.
"We placed the ratings on CreditWatch because we have not been able to confirm reports that Davomas missed a coupon payment due on March 7, 2012," said Standard & Poor's credit analyst Xavier Jean. The Indonesian stock exchange suspended trading in Davomas shares on March 9, 2012, following news reports that the company failed to pay US$3.56 million interest on its senior secured notes.
"We aim to resolve the credit watch placement when we obtain greater clarity on Davomas' payment of its coupon due on March 7, 2012," said Jean. 
"We would lower the rating to 'D' if we can confirm that the company missed the coupon payment. We could affirm the rating with a negative outlook if we can confirm that the company made the coupon payment."

Disclosure: No position at the stock mentioned above.

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