Citra Marga Downgraded to CC by S&P.MELBOURNE, Australia--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/3/98--Standard & Poor's today downgraded the local currency and foreign currency ratings on P.T. Citra Marga Marga can refer to:
Note whose interest payment varies with short-term interest rates. floating-rate note An unsecured debt issue with an interest rate that is reset at specified intervals (usually every six months) according to a (FRNs). While CMNP has adequate rupiah ru·pi·ah n. pl. rupiah See Table at currency. [Hindi rupay  , rupiy cash holdings
to satisfy the obligation, a US$6.6 million interest payment due on June
15 remains unpaid. The ratings remain on Creditwatch with negative
implications.CMNP currently has cash holdings of about 1.3 trillion rupiah (about US$87 million at an exchange rate of 15000 rupiah). Negotiations regarding a proposed payment schedule currently are underway with the trustee for the FRNs. Unless an agreement can be reached that is acceptable, noteholders are likely to enforce a default. This will in turn result in a cross default to the US$125 million 144A Eurobonds issued by CMNP. The next payment under the Eurobond is US$4.5 million due on Aug. 20, 1998. Even if CMNP is able to satisfy the overdue OVERDUE. A bill, note, bond or other contract, for the payment of money at a particular day, when not paid upon the day, is overdue. 2. The indorsement of a note or bill overdue, is equivalent to drawing a new bill payable at sight. 2 Conn. 419; 18 Pick. and upcoming interest payments, its operating and financial environment has weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. severely.
Increased fuel prices, spiraling inflation, and massive economic
uncertainty have resulted in reduced traffic volumes on the Jakarta
Intra Urban Tollway, CMNP's core asset. Traffic was down 12% for
the first six months of 1998 from the same period last year, with March
and May traffic numbers in particular affected by the civic disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. that proceeded the change in presidency. In addition, the focus on the
investments of the family of the former President Soeharto has increased
the political risk associated with the role of President Soeharto's
daughter, Mrs. Siti Hardiyanti Rukamana, as founder and President
Director of CMNP.In Standard & Poor's view, it is increasingly unlikely that CMNP will be able to fund the repayment of the FRNs in December 1998. The high degree of political and economic uncertainty and disruption to the domestic rupiah payments system will make it difficult for CMNP to access domestic or international debt or equity markets. Standard & Poor's will continue to monitor the financial and economic situation as it develops in Indonesia, and more particularly any impacts on the creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. of CMNP, Standard & Poor's said. -- CreditWire
CONTACT: Louise Griffiths, Melbourne (61) 3-9250-4563
Copyright 1998, Standard & Poor's Rating Services
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