'DGS defaults on payment'

'DGS defaults on payment'

HONG KONG (Dow Jones): Indonesian fishing concern P.T. Daya Guna Samudra will only pay half of its coupon payment due Friday, bankers in Hong Kong said.

According to the bankers, the company said it would pay the other half Jan. 5, 2001.

One trader noted the market had already priced in Daya Guna's potential default and the bond, which is due in 2007, last traded at between 25 and 35 cents to the dollar. He added Daya Guna's outstanding US$225 million due 2007 rarely trades.

U.S. credit rating agencies Standard & Poor's Corp. and Moody's Investors Service Inc. have both downgraded Daya Guna in the past two months.

S&P lowered its long-term corporate credit rating on the company to "SD" (selective default) from "CC". Also, the "CC" rating on the $225 million notes due 2007, issued by DGS International Finance Co. B.V. and guaranteed by Daya Guna, remains on credit watch with negative implications.

The agency said the rating action follows Daya Guna's failure to repay short-term loans of $83 million to its bank creditors since 1999.