S&P affirms Matahari rating

S&P affirms Matahari rating

SYDNEY (Reuter): Standard and Poor's Corp said yesterday it affirmed the "BB" corporate credit rating of Indonesian retailer PT Matahari Putra Prima.

S&P has also removed Matahari from its CreditWatch-Developing rating and said its outlook is positive.

S&P also said the BB rating on the US$100 million notes issued by Matahari International Finance Co BV, which are guaranteed by Matahari, had been affirmed and removed from CreditWatch- Developing.

"The positive rating outlook reflects Matahari's forthcoming rights issue that could raise about 900 billion Indonesian rupiah," S&P said in a statement.

"Matahari intends to use the proceeds to retire a proportion of its outstanding debt obligations and, together with operating cash flow, fund its ongoing store expansion program," it said.

S&P said Matahari's outstanding debt in June 1997 stood at Rp 669 billion.

Retiring outstanding debt obligations would see Matahari move to a net positive cash position.