Lippo Malls Indonesia Retail Trust (LMIRT) has obtained a secured amortising term loan facility of up to 2.5 trillion rupiah (S$209.5 million).
The loan comes with an average life of about eight years based on the facility agreement dated May 28, 2024, said LMIRT’s manager on Wednesday (May 29).
About 2.3 trillion rupiah of the proceeds will be used to prepay the trust’s Singapore dollar-denominated secured bank loans in June.
The manager noted that the balance proceeds will likely be available for drawdown in the third quarter upon satisfaction of certain conditions.
It added that the facility agreement requires a mandatory prepayment if Lippo Karawaci ceases to be the single largest unitholder of LMIRT and is no longer the ultimate shareholder of LMIRT’s manager.
If the prepayment event occurs, the aggregate level of loan facilities of LMIRT that may be affected as at Wednesday is about S$357.3 million, excluding interest.
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Additionally, the aggregate level of loan facilities of LMIRT’s subsidiaries that may be affected as at the date of this announcement is around S$633.5 million.
“This does not take into account the amount of the loan facilities which have not been drawn down,” noted the manager, referring to the new 2.5 trillion rupiah facility.
Fitch Ratings recently downgraded the long-term issuer default rating of LMIRT to “C” from “CC”.
It also downgraded the rating on LMIRT’s senior unsecured notes, due 2024 and 2026, to “C” from “CC”, with a recovery rating of “RR4”.
A rating of C indicates an issuer is near default, and that a default or default-like process has begun; a CC rating indicates very-high levels of credit risk, with a default of some kind appearing probable.
A recovery rating of RR4 suggests average recovery prospects if a default were to take place. Such securities have characteristics consistent with securities historically recovering 31 to 50 per cent of their current principal and related interest.
Units of LMIRT : D5IU 0%closed flat at S$0.012 on Tuesday.
