S&P: Bumi Resources 'SD' rating affirmed; rating on US$700 million notes lowered to 'D'

(Nov. 10, 2014)--Standard & Poor's Ratings Services said today that it had lowered its long-term issue rating on the US$700 million senior secured notes due 2017 that Indonesia-based coal mining company PT Bumi Resources Tbk. (Bumi Resources) guarantees. Bumi Investment Pte. Ltd. issued the notes. We removed the rating from CreditWatch, where it was placed with negative implications on Aug. 13, 2014.

We also affirmed our 'SD' long-term corporate credit rating and ASEAN regional scale rating on Bumi Resources. At the same time, we kept our 'CCC-' issue rating on the US$300 million senior secured notes due 2016 that another Bumi Resources' subsidiary Bumi Capital Pte. Ltd. issued on CreditWatch with negative implications. Bumi Resources guarantees these notes too.

"We lowered the issue rating on the US$700 million notes because Bumi Resources, the guarantor, has failed to make the interest payment within the 30-day grace period allowed under the bond indenture," said Standard & Poor's credit analyst Vishal Kulkarni.

The due date for interest payment was Oct. 6, 2014, and the company had a grace period till Nov. 7, 2014. Bumi Resources has informed the bond trustees that it will not be able to make the interest payments at least until Nov. 28, 2014, due to unplanned working capital issues.

We kept the ratings on the US$300 million notes due 2016 on CreditWatch to reflect the heightened risk of a missed coupon beyond the grace period. We understand that Bumi Resources intends to pay interest on these notes within the 30-day grace period that ends on Dec. 10, 2014.

We affirmed the rating on Bumi Resources because the company remains in default on only some of its financial obligations. (ends)