Datakom Asia's rating down

Datakom Asia's rating down

SINGAPORE (Dow Jones): Standard & Poor's Friday lowered its long-term corporate credit rating on Indonesia-based Datakom Asia (P.DTK) to 'SD', or selective default, from CC.

The CC rating on Pratama Datakom Asia B.V.'s US$260 million senior notes due 2005, which are guaranteed by Datakom, remains on CreditWatch with negative implications.

The downgrade reflects Datakom's current financial distress and the continuing problems in the pay-TV industry in Indonesia, amid a still very uncertain economic and political environment there, S&P said in a press release.

Datakom is in payment default on most of its debt obligations, including its senior bank debt. The US$260 million senior guaranteed notes carry an arrangement for the prefunding of the first three years of interest in an escrow account, S&P said.

While the balance in the escrow account was just sufficient to cover the last of the prefunded coupon payments of about US$17 million, due July 17, 2000, Datakom is not expected to be able to meet the next coupon payment, due January 2001, S&P added.