PEFINDO has assigned its idAAA(cg) rating for PT Adhi Commuter Properti Tbk

(November 29, 2023)--PEFINDO has assigned its idAAA(cg) rating for PT Adhi Commuter Properti Tbk (ADCP)’s proposed bond III year 2023 with total maximum amount of IDR500 billion. The proceed of its bond issuance will be used for working capital and refinancing. It will be fully guaranteed by Credit Guarantee and Investment Facility (CGIF, idAAA/Stable) to cover the principal and interest payments when they become due. The instrument rating is based on a full, unconditional and irrevocable guarantee from CGIF based on the guarantee agreement.

The corporate rating reflects strong support from its parent company, PT Adhi Karya (Persero) Tbk (ADHI), captive market from light rail transit (LRT) commuters, and good asset quality. The rating is constrained by its aggressive capital structure and weak cash flow protection measures, limited recurring income, as well as vulnerability to changes in macroeconomic conditions.

The instrument rating is based on a full, unconditional and irrevocable guarantee from CGIF based on the guarantee agreement, and CGIF’s superior financial strength. The instrument rating could be lowered if the guarantor rating is lowered, or there is any violation to the guarantee agreement that leads to the termination of the guarantee. The rating may be raised if the Company consistently achieve its projected marketing sales and revenue realization followed by substantial reduction of its debt level. The rating may also be lowered if ADCP incurs additional debt beyond projections and if its revenue or EBITDA was lower than expected, due to a low take-up rate, delayed construction progress, or higher costs than estimated, resulting in a more aggressive capital structure and weaker cash flow protection measures.

Established on March 9, 2018, ADCP is a developer specializing in property products with a transit-oriented development (TOD) concept. The Company sells apartments, office towers as well as landed houses, and generates recurring income from hotels with brand name of GranDhika in Jakarta, Semarang, and Medan. As of May 31, 2023, ADCP’s shareholders were ADHI (90%) and public (10%).

As a guarantor, CGIF was established in November 2010 as a key component of the Asian Bond Market Initiative (ABMI) to promote economic development and financial stability by developing local currency regional bond markets in the ASEAN region. This mandate was extended by the contributing members, consisting of ASEAN+3 governments (China, Japan, and the Republic of Korea) and the Asian Development Bank (ADB). It was established as a trust fund of the ADB (rated AAA/stable by Standard and Poor’s), meaning that although it is operationally and financially separate from ADB, it is not a separate legal entity. (ends)