S&P cuts APP units ratings

S&P cuts APP units ratings

JAKARTA (JP): Standard & Poor's said on Monday it had lowered its long-term local and foreign currency corporate credit ratings on Asia Pulp & Paper Co. Ltd. and its Indonesian operating subsidiaries, to 'D' from double-'C'.

The subsidiaries are PT Pindo Deli Pulp & Paper Mills (Pindo Deli); PT Indah Kiat Pulp & Paper Corp. Tbk. (Indah Kiat); PT Pabrik Kertas Tjiwi Kimia Tbk. (Tjiwi Kimia); and PT Lontar Papyrus Pulp & Paper Industry (Lontar Papyrus).

At the same time, Standard & Poor's lowered to 'D' from double-'C' its ratings on all of Pindo Deli's senior unsecured debt and the senior secured notes issued by APP International Finance Co. B.V. and guaranteed by APP and Lontar Papyrus.

The rating actions follow the failure of APP and Pindo Deli to make scheduled April 1, 2001 interest payments on the note issues. The interest payments are not expected to be made within their respective grace periods as a result of the cessation of all group payments of interest and principal on outstanding debt.

The downgrade also comes in the wake of the failure of APP's Indonesian operating subsidiaries to make interest and principal payments on various unrated debt.