Lippo Malls Indonesia Retail Trust (LMIRT) was downgraded to CCC+ from B by Fitch due to the “heightened risk” it faces in refinancing large upcoming debt maturities. This is amid “unfavorable debt capital market conditions and weakening investor sentiment”. LMIRT would need external financing to for a large chuck of its S$580mn in debt due over the next 16 months. Fitch highlights that LMIRT’s debt/total assets ratio has risen to 44.6% by end-2022 vs. 42.5% at end-2021. This would leave little room under the implemented regulatory ceiling of 45%, said Fitch Besides, LMIRT’s perpetual bond’s coupon is set to rise to S$19mn in 2023, from S$17mn in 2022 after the bond was not called in December 2022. LMIRT also has high forex risk given that it has dollar bonds due while its revenues are generated in Indonesian rupiah.
LMIRT’s 8.096% Perp was down 3.9 points to 21.8.