/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/090921.mbx T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, September 21, 2009, Vol. 12, No. 186 Headlines A U S T R A L I A BABCOCK & BROWN: CIMB Acquires Firm's Interest in Asian Fund BABCOCK & BROWN INFRA: Gets Alternative Offer from Big Funds GREAT SOUTHERN: Pulpwood Plantations Urge Contenders to Go Public NYLEX LTD: Creditors Vote on Deed of Company Arrangement TIMBERCORP LTD: Sells Almond Plantations to Olam Int'l. for $128MM TZ LIMITED: Prepares to Lodge Claim Against Former Chairman C H I N A COUNTRY GARDEN: US$75 Mil. Notes Won't Affect S&P's 'BB' Rating COUNTRY GARDEN: US$75 Mil. Bonds Won't Affect Moody's 'Ba2' Rating DATANG INTERNATIONAL: Fitch Cuts Issuer Default Rating to 'BB+' HUADIAN POWER: Fitch Downgrades Issuer Default Ratings to 'BB' HUANENG POWER: Fitch Downgrades Issuer Default Rating to 'BB+' H O N G K O N G CALPA AURAL: Members' Meeting Set for October 12 CARRYRICH INDUSTRIAL: Court to Hear Wind-Up Petition on October 14 CENTRE RISE: Appoints Rainier and Victor as Liquidators CHAT HAY: Court to Hear Wind-Up Petition on November 4 CHINA RAILWAY: Court to Hear Wind-Up Petition on October 21 ECO SWISS: Creditors' Meeting Set for October 14 FAMEAST LIMITED: Court Enters Wind-Up Order FLANNEL LIMITED: Releases Hill as Liquidator GOOD CLEVER: Court to Hear Wind-Up Petition on October 14 GRANDSUIT MACHINERY: Members and Creditors to Meet on October 17 INFIELD LIMITED: Court Enters Wind-Up Order JDC CORPORATION: Pays Third and Final Dividend JUMBO MERIT: Court Enters Wind-Up Order KAM LUNG: Court to Hear Wind-Up Petition on October 14 KI DA: Court to Hear Wind-Up Petition on October 28 NEWLINK INVESTMENT: Court to Hear Wind-Up Petition on October 14 PACIFIC MARBLE: Releases Hill as Liquidator PEAK QUALITY: Court Enters Wind-Up Order PREMIER DRAGON: Court to Hear Wind-Up Petition on October 28 SURE TALENT: Court to Hear Wind-Up Petition on October 7 I N D I A AIR INDIA: Aviation Ministry to Seek Gov't OK for Capital Infusion CMM INFRAPROJECTS: ICRA Assigns 'LBB-' Rating to Bank Debt DY UPPAR: ICRA Assigns 'LB+' Rating on INR350MM Fund Based Limits KANDAGIRI SPINNING: CARE Assigns 'CARE BB' Rating on Bank Debts NAGAR KOPARGAON: ICRA Places 'LB+' Rating on LT Bank Facilities TATA MOTORS: May Sell Up to 15% Stake in Vehicle Financing Unit TATA STEEL: May Refinance Around US$900-Mln Corus Debt VASANTHA SPINNERS: ICRA Rates INR327 Million Term Loans at 'LBB' I N D O N E S I A BANK CENTRAL: Moody's Raises Foreign Cur. Deposit Rating to Ba3 BANK CIMB-NIAGA: Moody's Raises Foreign Cur. Deposit rating to Ba3 BANK DANAMON: Moody's Raises Foreign Cur. Deposit Rating to Ba3 BANK INTERNASIONAL: Moody's Raises For. Cur. Deposit Rating to Ba3 BANK MANDIRI: Moody's Raises Foreign Cur. Deposit Rating to Ba3 BANK NEGARA: Moody's Raises Foreign Cur. Deposit Rating to Ba3 BANK PERMATA: Moody's Raises Foreign Cur. Deposit Rating to Ba3 BANK RAKYAT: Moody's Raises Foreign Cur. Deposit Rating to Ba3 PT INDIKA: Consent Solicitation Won't Affect Fitch's 'B' Ratings PT INDIKA: Consent Solicitation Won't Affect Moody's 'B2' Rating J A P A N AIFUL CORP: Seeks to Reschedule Loan Payments HUIS TEN: Nomura Principal in Talks with HMI on Capital Infusion JAPAN AIRLINES: Bankruptcy Not An Option for JAL, Minister Says MAZDA MOTOR: China Sales May Rise 40% in July-September, CFO Says SANYO ELECTRIC: Expects to Post Second Annual Loss in FY2010 N E W Z E A L A N D WINDFLOW TECHNOLOGY: Annual Loss Narrows to NZ$1.23 Million - - - - - ================= A U S T R A L I A ================= BABCOCK & BROWN: CIMB Acquires Firm's Interest in Asian Fund ------------------------------------------------------------ The South East Asian Strategic Assets Fund, advised and managed by CIMB Standard, has completed the acquisition of Babcock & Brown Ltd.’s interest in the Babcock & Brown Asia Infrastructure Fund, The Star reports. The Star quoted CIMB Standard chief executive officer Dr. Johan Bastin as saying that “With the acquisition, we effectively take over BBAIF’s office in Bangkok and this immediately gives us a presence in Thailand, one of SEASAF’s main markets.” Headquartered in Sydney, Australia, Babcock & Brown Limited (ASX:BNB) -- http://www.babcockbrown.com/-- is a global alternative asset manager specializing in the origination and management of asset in sectors, where the company has a franchise and proven track record, and where there are opportunities to add scale, infrastructure, air operating leasing and selected real estate. Babcock & Brown operates from 31 offices across Australia, North America, Europe, Asia and the United Arab Emirates. The company has established a specialized funds and asset management platform across the operating divisions that have resulted in the establishment of a number of listed and unlisted focused investment vehicles in areas, including real estate, renewable energy and infrastructure. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 13, 2009, Babcock & Brown appointed voluntary administrators after investors in the company's subordinated notes listed in New Zealand voted on March 13 against a special resolution to restructure the terms of the notes. Under the special resolution, the company's equity and subordinated note holders won't receive any return. Babcock & Brown appointed David Lombe and Simon Cathro of Deloitte Touche Tohmatsu as Voluntary Administrators. The TCR-AP reported on Aug. 25, 2009, that Babcock & Brown Ltd creditors voted to liquidate the assets of the company. Deloitte said the vote empowers it to investigate matters surrounding the collapse of the group, including potential conflicts of interest between the boards of Babcock & Brown and affiliated company Babcock & Brown International Pty. Ltd. which held most of the group's assets. BABCOCK & BROWN INFRA: Gets Alternative Offer from Big Funds ------------------------------------------------------------ Adele Ferguson at The Australian reports that Babcock & Brown Infrastructure has received an alternative recapitalization proposal from a group of international hedge funds. Citing a letter sent to the two BBI independent directors, The Australian discloses that the global investment bank, acting on behalf of eight investors, said that it had structured a new recapitalization proposal which was at least $500 million better than an existing deal now being discussed by the board , which involves a new cornerstone investor. The eight investors proposed to support $800 million of a $1 billion convertible bond and equity issue and a $350 million bank facility backed by existing lenders, and no asset sales at firesale prices, The Australian relates, citing the letter, addressed to BBI chairman and former Queensland treasurer David Hamill and former AMP executive Leigh Hall. The Troubled Company Reporter-Asia Pacific reported on Sept. 4, 2009, that Babcock & Brown Infrastructure said it is talks with a potential cornerstone investor. The board believed that the participation of a well-capitalized investor would significantly increase the likelihood of a transaction being successfully completed prior to the group’s debt facilities maturing. "The terms of a transaction with the potential cornerstone investor have been discussed (although the structure and details of any such transaction are not yet finalized)," BBI said in a statement September 4. "A comprehensive recapitalization on the terms discussed requires the consent of existing lenders and BBI has approached the lenders to obtain their consent to the recapitalization. To assist its recapitalization objectives, BBI has appointed financial advisors to the proposed recapitalization, and Gresham Advisory Partners have been appointed as financial advisors to the BBI Boards." About Babcock & Brown Infrastructure Based in Australian, Babcock & Brown Infrastructure Group (ASX:BBI) -- http://www.bbinfrastructure.com/-- is a specialist infrastructure company, which provides investors access to a diversified portfolio of quality infrastructure assets. BBI's investment focuses on acquiring, managing and operating quality infrastructure assets in Australia and internationally. BBI's portfolio is diversified across two asset class segments: Energy Transmission and Distribution, and Transport Infrastructure. The company comprises of Babcock & Brown Infrastructure Trust (BBIT) and Babcock & Brown Infrastructure Limited (BBIL). On July 12, 2007, Benelux Port Holdings S.A, which is a 75% subsidiary of BBIL, acquired Manuport Group NV. On August 2, 2007, Babcock & Brown Italian Port Holdings S.r.l, a wholly owned subsidiary of BBIL, acquired an 80% interest in the TRI (Estate) S.p.A group of companies. On October 11, 2007, BBI Finnish Ports Oy, a wholly owned subsidiary of BBIL, acquired the companies Rauma Stevedoring and Botnia Shipping. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 3, 2009, Moody's Investors Service confirmed Babcock & Brown Infrastructure Group's B1 corporate family rating and B2 senior secured rating. The outlook on the ratings is stable. GREAT SOUTHERN: Pulpwood Plantations Urge Contenders to Go Public ----------------------------------------------------------------- Sara Rich at The Australian reports that one of the frontrunners in the bidding race for Great Southern's forestry assets has called for the other contenders to make their offers public. According to the report, Pulpwood Plantations, headed by Perth businessman Gordon Martin, said it was concerned growers would only have a short amount of time to make a decision if the other promoters did not come forward soon with the details of their offers. "Great Southern's receiver will stop funding on September 30, leaving growers with a narrow window of time in which to decide how to protect their investment," the report quoted Mr. Martin as saying. "We are concerned that growers will be delayed in their consideration by the hope of offers (by groups) that have yet to confirm any detail, including their source of funding." The Australian says written expressions of interest for purchasing all or some of Great Southern's assets and to replace Great Southern Asset Management as responsible entity close on September 23. Receiver McGrathNicol, according to The Australian, confirmed there were a number of interested parties, but Pulpwood Plantations said it was the only contender that had released the details of its offer. The Troubled Company Reporter-Asia Pacific reported on September 18, that Perth businessman John Poynton and forester Tony Jack have emerged as major new bidders for the timber assets of failed agribusiness company Great Southern. Mr. Poynton, a former stockbroker and now head of Azure Capital, a boutique corporate adviser, is backing Mr. Jack's Black Tree group, the Herald said. The new group is a competitor to the frontrunner, Pulpwood Plantations. A TCR-AP report on Aug. 17, 2009, said that Mr. Martin set up Pulpwood Plantations to put between AU$10 million and AU$20 million into the Great Southern schemes. Mr. Martin said that a group called Primary Securities, which has experience with Managed Investment Schemes and was independent of his organization, was willing to be nominated as Responsible Entity to act as manager of the six schemes, which appear to account for around half of Great Southern's timber schemes. As reported in the TCR-AP on September 9, 2009, The Australian Associated Press said the receivers of Great Southern have started selling all, or parts, of the failed agricultural projects operator. Receiver McGrathNicol have called for interest from third parties to buy all or part of the company: the land owned by Great Southern entities and other of its assets, including assets associated with Great Southern's managed investment schemes, the AAP said. According to the AAP, McGrathNicol has also called for expressions of interest from parties who may be interested in replacing Great Southern Managers Australia Ltd (GSMAL) as the responsible entity for all or some of the managed investment schemes, in combination with the sales process or separately. About Great Southern Based in West Perth, Australia, Great Southern Limited (ASX:GTP) -- http://www.great-southern.com.au/-- is engaged in the development, marketing, establishment and management of agribusiness-based projects. The Company provides finance, directly and through third party financiers, to approved investors who wish to invest in the Company's projects. The Company also acquires and manages farmland and other agribusiness related properties which are held for long term investment. It operates an agricultural investment services business offering two key products: agricultural managed investment schemes, which is provision of MIS products in the forestry and agribusiness sector, and agricultural funds management, which are agricultural investment funds providing investors exposure to a portfolio of agricultural assets. Great Southern manages about 43,000 investors through 45 managed investment schemes. The group owns and leases approximately 240,000 hectares of land. It also owns more than 150,000 cattle across approximately 1.5 million hectares of owned and leased land. Great Southern entered into voluntary administration in May. The directors of Great Southern Limited and Great Southern Managers Australia Limited appointed Martin Jones, Andrew Saker, Darren Weaver and James Stewart of Ferrier Hodgson as administrators of the two companies and majority of their units. McGrathNicol was appointed receivers to the company and certain of its subsidiaries by a security trustee on behalf of a group of secured creditors. As of April 30, 2009, Great Southern had total liabilities of AU$996.4 million, including loans and borrowings of AU$833.9 million. The loans and borrowings included AU$375 million from the group banks. The secured creditors include ANZ, Commonwealth Bank and BankWest. NYLEX LTD: Creditors Vote on Deed of Company Arrangement -------------------------------------------------------- The creditors of Nylex Limited have opted to place the company under a Deed of Company Arrangement to enable the recapitalization of the corporate shell to take place, George Georges, the company's administrator, said in a filing to the Australian Securities Exchange. The Troubled Company Reporter-Asia Pacific reported on Feb. 13, 2009, that Nylex Limited has appointed George Georges and John Lindholm at Ferrier Hogson as voluntary administrators. The company's secured creditors, Australia and New Zealand Banking Group Limited and Westpac Banking Corporation, also appointed Colin Nicol, Johan Vorster and Sam Davies of McGrath Nicol as receivers and managers of the assets of the Nylex Limited group -- excluding Nylex Properties Pty Ltd and Champion Environmental Technologies Pty Ltd. Nylex Limited's principal activities are carried out through three segments: Lifestyle, Solutions and Automotive. Nylex Lifestyle distribute Nylex, Gardena, Esky, Ajax Fasteners, Senco, Melded, Colorino and Frontrunner branded products. Nylex Solutions supply plastic based solutions including water tanks, garbage bins, communications pits and plastic containment solutions. Nylex Automotive supply plastic based products and interior carpets to the car manufacturers and their suppliers including fuel tank. Nylex operates in Australia and New Zealand. TIMBERCORP LTD: Sells Almond Plantations to Olam Int'l. for $128MM ------------------------------------------------------------------ The Sydney Morning Herald reports that Timbercorp Limited's almond plantations have been sold to Singapore-based multinational food giant Olam International for $128 million. According to the report, Timbercorp liquidator KordaMentha said the agreement was subject to regulatory approvals and might take up to two months to complete. The Herald says the sale involves 8096 hectares of almond groves near the Murray River around Robinvale in north-west Victoria, and represents about 30% of the Australian almond crop. It also includes 40,825 megalitres of water rights, the report notes. About 7,000 growers invested in the almond plantings under managed investment schemes, but the proceeds growers and other stakeholders will receive from the transaction are yet to be negotiated, according to the Herald. Based in Melbourne, Australia, Timbercorp Limited (ASX:TIM) -- http://www.timbercorp.com.au/-- is engaged in the establishment, development, marketing and management of primary industry-based projects, the acquisition of land, water rights and infrastructure to support these projects, and the provision of finance to growers in these projects. The company is also involved in eucalypt and olive oil processing operations, asset development, asset management, the sale of agricultural assets and holding investments in agricultural-related enterprises. As reported in the Troubled Company Reporter-Asia Pacific on April 24, 2009, Timbercorp called in voluntary administrators to the company and its subsidiaries. The company appointed Mark Korda and Leanne Chesser of KordaMentha as voluntary administrators. "The company had been hurt by the combined impact of declining global asset values, tightening credit, the economic downturn and drought," according to a statement issued by Kordamentha. On June 29, 2009, the creditors voted unanimously to wind up the 41 companies in the Timbercorp Group and put them into liquidation. TZ LIMITED: Prepares to Lodge Claim Against Former Chairman ----------------------------------------------------------- TZ Limited is preparing a statement of claim detailing allegations against its former chairman, Andrew Sigalla, after court proceedings in Sydney last week, Rebecca Urban at The Australian The Australian says the technology company, together with the Australian Securities & Investments Commission, was in the Supreme Court of NSW last week in relation to complaints against Mr. Sigalla, his private company ZMS Investments and four unidentified parties. It follows a forensic accounting investigation conducted by TZ recently that revealed that its cash reserves, as disclosed to investors at the end of March, had been inflated by more than AU$6 million, The Australian notes. According to the report, the company has since issued letters of demand to certain previous directors of the company, including Mr. Sigalla, seeking the return of significant sums of money. ASIC and the company last month obtained freezing orders over the assets of Mr. Sigalla and several associates, according to The Australian. As reported in The Troubled Company Reporter-Asia Pacific on Aug. 7, 2009, The Australian disclosed that shares in the Company have been suspended as a new board of directors, led by Wizard Home Loans founder Mark Bouris, investigates alleged discrepancies in the financial accounts discovered following its appointment on June 18. The board is also trying to broker a deal with TZ's main financier, US-based hedge fund QVT, after discovering that the Company had defaulted on the terms of a AU$24 million convertible note agreement. About TZ Limited TZ Limited (ASX:TZL) -- http://www.tzlimited.com/-- is an Australia-based company engaged in the development and licensing of intellectual property particularly, Intelligent Fastening, Assembly Enabling and FutureWall technologies through Telezygology, Inc. The Company provides a full service capability in product development and engineering services through PDT Group. The Company's operations are based in Illinois, United States. It operates in two segments: engineering and design, and investment. The Company's subsidiaries include Telezygology, Inc., PDT Holdings, Inc., Product Development Technologies, Inc., PDT Tooling, Inc., PDT Southeast Limited Liability Company (LLC) and CJSC PDT Ukraine. ========= C H I N A ========= COUNTRY GARDEN: US$75 Mil. Notes Won't Affect S&P's 'BB' Rating --------------------------------------------------------------- Standard & Poor's Ratings Services said that the corporate credit rating and outlook on Country Garden Holdings Co. Ltd. (BB/Stable/--) and the 'BB-' issue rating on the company's US$300 million 11.75% senior unsecured are not affected by the announcement that Country Garden has issued another US$75 million in notes. S&P continue to expect Country Garden's financial metrics to remain in line with its peers' and the 'BB' rating category for the next 12 months. The terms and conditions of the additional issuance are the same as those of the US$300 million bond issued on Sept. 2, 2009, with the exception that the offer price is 100.915% of the principal amount rather than 100%. The effective yield to maturity of the additional issuance is 11.5%. COUNTRY GARDEN: US$75 Mil. Bonds Won't Affect Moody's 'Ba2' Rating ------------------------------------------------------------------ Moody's Investors Service sees no impact on Country Garden Holdings Company Ltd.'s Ba2 corporate family rating or on its senior unsecured rating of Ba3 following the company's announcement that it was issuing an additional US$75 million of its 5-year senior unsecured 144A/Regulation S bonds. The outlook on the ratings remains negative. The additional bonds, which are rated Ba3, have the same terms and conditions as the US$300 million bonds issued on 10 September 2009. The bond rating has been lowered by one notch from the Corporate Family Rating of Ba2 to reflect the risks of legal and structural subordination, as subsidiary and secured debts are expected to remain above 20% of the company's total assets. Proceeds from the bonds will be used for funding property projects, and general corporate purposes. "The increase in the size of the bond issuance from US$300 million to US$375 million does not result in any material change to the company's credit profile," says Peter Choy, a Moody's Vice President and Senior Credit Officer, adding, "In fact, it will further enhance Country Garden's liquidity." The key rating drivers for Country Garden remain its large scale and extensive experience in suburban property development in Guangdong Province, China. In addition, its low land costs, strong sales, and pricing flexibility have also resulted in stable sales through the down cycle. At the same time, however, the rating is tempered by the challenge facing the company to raise additional capital to fund its rapid growth model, and by its reliance on cash flow contributions from Guangdong Province. The last rating action on Country Garden was taken on 1 September 2009, when Moody's assigned a Ba3 rating to the company's US$300 million 144A Regulation S, bonds with a negative outlook. Founded in 1997 in China and listed in Hong Kong in April 2007, Country Garden Holdings Company Ltd is one of the leading integrated property developers in China. DATANG INTERNATIONAL: Fitch Cuts Issuer Default Rating to 'BB+' --------------------------------------------------------------- Fitch Ratings has downgraded Datang International Power Generation Co., Ltd's Long-term foreign and local currency Issuer Default Ratings and senior unsecured ratings to 'BB+' from 'BBB-' and its Short-term foreign and local currency IDRs to 'B' from 'F3'. The Outlook is Stable. "The downgrades reflect Fitch's reassessment of DTP's linkages with controlling shareholder China Datang Corporation," says Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team. "The downgrades also reflect DTP's and China Datang's aggressive, largely debt-funded capex programs and weakened domestic electricity demand, which are expected to delay the companies' ability to reduce their high leverage," adds Mr. Wong. Fitch applied the Parent and Subsidiary rating Linkage methodology to assess the linkages between DTP and its parent China Datang. The parent's consolidated credit profile is weaker than DTP's stand-alone 'BB+' rating by one notch and given the lack of ring fencing of DTP from its parent, DTP's rating, before any consideration of State support, is constrained at 'BB'. In addition, Fitch has applied a "bottom-up" approach as set out in the same methodology to notch up the final rating to 'BB+' from the constrained 'BB', reflecting DTP and China Datang's strategic importance to the country and the tangible support extended by the Chinese government. DTP's ratings also reflect its position as the second-largest Chinese independent power producer, with diversified fuel mix, above-average efficient coal-fired power plants, lowest unit fuel costs and strong EBITDAR margins. Its vertical integration strategy, in the agency's view, will enhance its long term competitive advantage through securing controllable long-term coal supplies and improving margin erosion protection against a surge in fuel costs. DTP also benefits from good access to domestic banks and capital markets, which is expected to mitigate its liquidity risk. The Stable Outlook reflects Fitch's expectation that the Chinese government will continue to provide support to the Chinese Independent Power Producers and that coal prices are likely to remain largely stable. Fitch expects DTP's total adjusted debt/operating EBITDAR to fall to 7x by 2011. A prolonged suspension of the tariff mechanism during periods of substantial coal price increase and/or significant debt-funded capex and acquisitions would be likely to lead to negative rating action. DTP had an installed capacity of 27.8 gigawatts at end June 2009. The company's 2009-2015 capex plans include the development of renewable energy capacity and the entry into nuclear power generation, while reducing the proportion of coal-fired capacity to 70% by 2015 from 87.6%. The company also hopes to secure controllable coal supplies to increase coal self-sufficiency to 40% by 2015, to construct railways and to acquire coal shipping capabilities to enhance its vertical integration. HUADIAN POWER: Fitch Downgrades Issuer Default Ratings to 'BB' ------------------------------------------------------------- Fitch Ratings has downgraded Huadian Power International Corporation Limited's Long-term foreign and local currency Issuer Default Ratings to 'BB' from 'BBB-', its Short-term foreign and local currency IDRs to 'B' from 'F3' and revised the ratings Outlook to Stable from Negative. "The downgrades reflect Fitch's reassessment of HDPI's linkages with controlling shareholder China Huadian Corporation," says Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team. Fitch applied the Parent and Subsidiary rating Linkage methodology to assess the linkages between HDPI and its parent China Huadian. The parent's consolidated credit profile is weaker than HDPI's stand-alone 'BB+' rating by two notches and given the lack of ring fencing of HDPI from its parent, HDPI 's rating, before any consideration of State support, is constrained at 'BB-'. In addition, Fitch has applied a "bottom-up" approach as set out in the same methodology to notch up the final rating to 'BB' from the constrained 'BB-', reflecting HDPI and China Huadian's strategic importance to the country and the tangible support extended by the Chinese government. "HDPI's higher-than-average sensitivity to coal price volatility and its on-going aggressive capital expenditure program is expected to continue constraining its standalone rating," adds Mr. Wong. Although HDPI's operating EBITDAR margin rebounded to 24.7% in H109 from 10.4% in FY08, benefiting from two on-grid tariff adjustments implemented during Q308 and lower unit fuel costs, Fitch notes it remains vulnerable to coal price volatility. HDPI and China Huadian's ongoing aggressive capital expenditure program which are largely debt-funded as well as weakened electricity demand is expected to delay both companies' ability to reduce their high leverage. As at June 30, 2009, HDPI have thermal, hydro and wind power projects totalling 5.6GW under construction, while a further 4.4GW obtained preliminary approval during H109. HDPI and China Huadian target to increase their respectively installed capacity to 40GW and 100GW by 2013 (from 23GW and 69GW as at end 2008), and at the same time accelerate investments in coal mines to reduce exposure to coal price volatility. HDPI's ratings also take into account its position as a leading Chinese IPP with large-scale and above-average-efficiency generating assets and improved utilization hours; most notably in Shandong Province where 50% of HDPI's installed capacity is located. Fitch notes that HDPI's liquidity risk has moderated, with the successful domestic bond issuance during H109 of CNY3 billion and available credit facilities from domestic banks totalling CNY37.2 billion as at June 30, 2009. The Stable Outlook reflects Fitch's expectation that the Chinese government will continue to provide support to Chinese IPPs and that coal prices are to remain largely stable. Fitch expects HDPI's total adjusted debt/operating EBITDAR to fall below 7x by 2011. A prolonged suspension of the tariff mechanism during periods of substantial coal price increases and/or significant debt-funded capex and acquisitions would be likely lead to a negative rating action. HUANENG POWER: Fitch Downgrades Issuer Default Rating to 'BB+' -------------------------------------------------------------- Fitch Ratings has downgraded Huaneng Power International, Inc's Long-term foreign and local currency Issuer Default Ratings and senior unsecured debt rating to 'BB+' from 'BBB', and its Short- term foreign and local currency IDRs to 'B' from 'F3'. The Outlook is Stable. "The downgrades reflect HNP's weakened standalone credit profile as well as Fitch's reassessment of HNP's linkages with controlling shareholder China Huaneng Group," notes Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team. HNP's total borrowings rose by 181% to CNY109 billion during FY08 as an unprecedented surge in coal prices significantly reduced its funds from operations, while its large capital expenditure program and acquisition of SinoSing Power widened its negative free cash flow to record levels. "Furthermore, weakened domestic electricity demand and a largely debt-funded capital expenditure program in 2009-2010 is expected to delay HNP's ability to de- leverage, leading to the downgrade of its stand-alone rating, that is, its rating excluding any influence from its parent or the government, its ultimate owner," adds Mr. Wong. The company has an aggressive capex program to increase its capacity from 40 gigawatts to 60GW by 2010 to maintain its market share and leadership position. "HNP's H109 unit fuel costs declined 12.9% compared to FY08 and the company benefited from two tariff adjustments implemented during H208. However, HNP's operating EBITDAR margin is unlikely to return to FY07 levels as Fitch does not expect thermal coal prices to decline significantly in H209 and 2010," adds Mr. Wong. The ratings reflect HNP's position as the largest Chinese independent power producer, with a good geographic diversification of generating assets and above-average efficient coal-fired plants. Fitch notes that HNP's good access to domestic banks and capital market largely mitigates its liquidity risk despite substantial debt maturing within the next 12 months totalling CNY44.8 billion (as at June 30, 2009) and aggressive capital- expenditure plans. Fitch applied the Parent and Subsidiary rating Linkage methodology to assess the linkages between HNP and its parent China Huaneng. The parent's consolidated credit profile is weaker than HNP's stand-alone 'BB+' rating by one notch and given the lack of ring fencing of HNP from its parent, HNP's rating, before any consideration of State support, is constrained at 'BB'. In addition, Fitch has applied a "bottom-up" approach as set out in the same methodology to notch up the final rating to 'BB+' from the constrained 'BB', reflecting HNP's and China Huaneng's strategic importance to the country and the tangible support extended by the Chinese government. The Stable Outlook reflects Fitch's expectation that the Chinese government will continue to provide support to the Chinese IPPs and that coal prices are likely to remain largely stable. Fitch expects HNP's total adjusted debt/operating EBITDAR to fall below 7x by 2011. A prolonged suspension of the tariff mechanism during periods of substantial coal price increase and/or significant debt-funded capex and acquisition would be likely to lead to a negative rating action. ================ H O N G K O N G ================ CALPA AURAL: Members' Meeting Set for October 12 ------------------------------------------------ The members of Calpa Aural-Laserpuncture Consultants Limited will hold their meeting on October 12, 2009, at 10:00 a.m., at 2201, Hong Kong Trade, 161 Des Voeux Road central, Hong Kong. At the meeting, Lau Yui Wing, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. CARRYRICH INDUSTRIAL: Court to Hear Wind-Up Petition on October 14 ------------------------------------------------------------------ A petition to wind up the operations of Carryrich Industrial Limited will be heard before the High Court of Hong Kong on October 14, 2009, at 9:30 a.m. Ching Kam Chan filed the petition against the company on Aug. 11, 2009. The Petitioner's solicitor is: Paul W. Tse World-Wide House, Room 2302 19 Des Voeux Road Central, Hong Kong CENTRE RISE: Appoints Rainier and Victor as Liquidators ------------------------------------------------------- On August 28, 2009, Lam Hok Chung Rainier and Jong Yat Kit Victor were appointed as liquidators of Centre Rise Trading Limited. The Liquidators can be reached at: Lam Hok Chung Rainier Jong Yat Kit Victor Pricewaterhouse-Coopers Prince's Building, 22nd Floor Central, Hong Kong CHAT HAY: Court to Hear Wind-Up Petition on November 4 ------------------------------------------------------ A petition to wind up the operations of Chat Hay Inter-United (Asia) Limited will be heard before the High Court of Hong Kong on November 4, 2009, at 9:30 a.m. Standard Chartered Bank (Hong Kong) Limited filed the petition against the company on August 28, 2009. The Petitioner's solicitors are: Tsang, Chan & Wong Wing On House, 16th Floor No. 71 Des Voeux Road Central Hong Kong CHINA RAILWAY: Court to Hear Wind-Up Petition on October 21 ----------------------------------------------------------- A petition to wind up the operations of China Railway Mall & Properties Development Limited will be heard before the High Court of Hong Kong on October 21, 2009, at 9:30 a.m. The petitioner's solicitor is: Lovells One Pacific Place, 11th Floor 88 Queensway, Hong Kong ECO SWISS: Creditors' Meeting Set for October 14 ------------------------------------------------ The creditors of Eco Swiss China Time Limited will hold their meeting on October 14, 2009, at 3:30 p.m., for the purposes provided in Sections 241, 242, 243, 244 and 255A of the Companies Ordinance. The meeting will be held at the 27th Floor of Alexandra House, 18 Chater Road, in Central, Hong Kong. FAMEAST LIMITED: Court Enters Wind-Up Order ------------------------------------------- On May 7, 2009, the High Court of Hong Kong entered an order to have Fameast Limited's operations wound up. Mat Ng is the company's liquidator. FLANNEL LIMITED: Releases Hill as Liquidator -------------------------------------------- On August 8, 2009, Nicholas Timothy Cornforth Hill was released as liquidator of Flannel Limited. GOOD CLEVER: Court to Hear Wind-Up Petition on October 14 --------------------------------------------------------- A petition to wind up the operations of Good Clever Development Limited will be heard before the High Court of Hong Kong on October 14, 2009, at 9:30 a.m. Bank of China (Hong Kong) Limited filed the petition against the company on August 10, 2009. The Petitioner's solicitors are: Ford Kwan and Company Chinachem Golden Plaza, Suites 1505-1508 77 Mody Road, Tshimshatsui East Kowloon, Hong Kong Telephone: 2366-0688 Facsimile: 2722-0736 GRANDSUIT MACHINERY: Members and Creditors to Meet on October 17 ---------------------------------------------------------------- The members and creditors of Grandsuit Machinery (H.K.) Limited will hold their meeting on October 17, 2009, at 10:00 a.m. and 11:00 a.m., respectively, at Room 1103 of Hang Seng Mongkok Building, 677 Nathan Road, in Mongkok, Kowloon. At the meeting, Chan Man Chung, the company's liquidator, will give a report on the company's wind-up proceedings and property disposal. INFIELD LIMITED: Court Enters Wind-Up Order ------------------------------------------- On August 3, 2009, the High Court of Hong Kong entered an order to have Infield Limited's operations wound up. Mat Ng is the company's liquidator. JDC CORPORATION: Pays Third and Final Dividend ---------------------------------------------- JDC Corporation, which is in compulsory liquidation, paid the third and final dividend on September 11, 2009. The company paid 2.11% to all received claims. The company's liquidator is: Kong Chi How, Johnson Wing On Centre Room 1302, 13th Floor 111 Connaught Road Central, Hong Kong JUMBO MERIT: Court Enters Wind-Up Order --------------------------------------- On July 28, 2009, the High Court of Hong Kong entered an order to have Jumbo Merit International Limited's operations wound up. Mat Ng is the company's liquidator. KAM LUNG: Court to Hear Wind-Up Petition on October 14 ------------------------------------------------------ A petition to wind up the operations of Kam Lung Enterprises Limited will be heard before the High Court of Hong Kong on October 14, 2009, at 9:30 a.m. Bank of China (Hong Kong) Limited filed the petition against the company on August 10, 2009. The Petitioner's solicitors are: Ford Kwan and Company Chinachem Golden Plaza, Suites 1505-1508 77 Mody Road, Tshimshatsui East Kowloon, Hong Kong Telephone: 2366-0688 Facsimile: 2722-0736 KI DA: Court to Hear Wind-Up Petition on October 28 --------------------------------------------------- A petition to wind up the operations of Ki Da Construction Company Limited will be heard before the High Court of Hong Kong on October 28, 2009, at 9:30 a.m. Ho Yun Shing filed the petition against the company on August 26, 2009. The Petitioner's solicitors are: W.K. To & Co. Wheelock House, 11th Floor 20 Pedder Street Central, Hong Kong NEWLINK INVESTMENT: Court to Hear Wind-Up Petition on October 14 ---------------------------------------------------------------- A petition to wind up the operations of Newlink Investment Limited will be heard before the High Court of Hong Kong on October 14, 2009, at 9:30 a.m. Bank of China (Hong Kong) Limited filed the petition against the company on August 10, 2009. The Petitioner's solicitors are: Ford Kwan and Company Chinachem Golden Plaza, Suites 1505-1508 77 Mody Road, Tshimshatsui East Kowloon, Hong Kong Telephone: 2366-0688 Facsimile: 2722-0736 PACIFIC MARBLE: Releases Hill as Liquidator ------------------------------------------- On August 28, 2009, Nicholas Timothy Cornforth Hill was released as liquidator of Pacific Marble & Granite (China) Limited. PEAK QUALITY: Court Enters Wind-Up Order ---------------------------------------- On August 13, 2009, the High Court of Hong Kong entered an order to have Peak Quality Limited's operations wound up. Mat Ng is the company's liquidator. PREMIER DRAGON: Court to Hear Wind-Up Petition on October 28 ------------------------------------------------------------ A petition to wind up the operations of Premier Dragon Investment Limited will be heard before the High Court of Hong Kong on October 28, 2009, at 9:30 a.m. Bank of China (Hong Kong) Limited filed the petition against the company on August 20, 2009. The Petitioner's solicitors are: Tony Kan & Co. World-Wide House, Suite 1808 No. 19 Des Voeux Road Central Hong Kong SURE TALENT: Court to Hear Wind-Up Petition on October 7 -------------------------------------------------------- A petition to wind up the operations of Sure Talent Development Limited will be heard before the High Court of Hong Kong on October 7, 2009, at 9:30 a.m. Meso Limited filed the petition against the company on August 6, 2009. The Petitioner's solicitors are: Messrs. Kelvin Cheung & Co. Hong Kong Trade Centre Unit 101, 1st Floor 161-167 Des Voeux Road Central Hong Kong ========= I N D I A ========= AIR INDIA: Aviation Ministry to Seek Gov't OK for Capital Infusion ------------------------------------------------------------------ The civil aviation ministry will shortly seek cabinet's approval to infuse equity into state-run carrier Air India, The Economic Times reported citing Civil Aviation Minister Praful Patel. The Times notes Mr. Patel told reporters on the sidelines of an industry conference that the carrier was looking to reduce its high-cost debt. Mr. Patel, the Times says, did not specify a time frame for taking the proposal to cabinet. Staff Incentive Cut The Hindu Business Line reports that the Air India management plans to temporarily push back its planned reduction in the productivity linked incentive scheme being paid to its 31,500 employees. According to the Business Line, sources said the decision was being considered in view of the festival season ahead. The Chairman and Managing Director has also been advised to look at taking the workforce along right now, they added, pointing out that the forthcoming elections to three State assemblies could also be a consideration, the Business Line relates. As reported in the TCR-AP on June 10, 2009, the National Aviation Company of India Ltd., the holding company for the carrier, was seeking INR14,000 crore in equity infusion, soft loans and grants. The TCR-AP reported on June 19, 2009, that Air India has been bleeding due to excess capacity, lower yield, a drop in passenger numbers, an increase in fuel prices and the effects of the global slowdown. Air India's losses have almost doubled to over INR4,000 crore in 2008-09 (INR2,226 crore in 2007-08), according to the Hindustan Times. A TCR-AP report on July 10, 2009, said NACIL is working overtime to prepare by the month-end a business plan and a financial restructuring plan. NACIL is also expected to come up with plans for the next six months, 12 months and 18 months for bringing in cost reduction and improving revenue generation. About Air India Air India -- http://www.airindia.com/-- transports passengers throughout India and to more than 40 destinations throughout the world. Affiliate Air India Express operates as a low-fare carrier, mainly between India and destinations in the Middle East, and Air India Cargo provides freight transportation. The government of India has merged Air India with another state- controlled carrier, Indian Airlines, which has focused on domestic routes. The combined airline, part of a new holding company called National Aviation Company of India, uses the Air India brand. The new Air India and its affiliates have a fleet of more than 110 aircraft altogether. CMM INFRAPROJECTS: ICRA Assigns 'LBB-' Rating to Bank Debt ---------------------------------------------------------- ICRA has assigned an LBB- rating to the INR250 million bank lines of CMM Infraprojects Limited. The rating takes into account CIL's experienced management and its reputed and diversified client base. The rating is, however, constrained by competitive nature of the industry and CIL's relatively low operating margins as compared to its peers. This coupled with CIL's relatively high gearing levels (gearing of 2.34 times as on March 31, 2009) has resulted in weak debt protection indicators. Further, CIL's modest scale of operations and low net-worth limits its ability to bid for larger and more complex projects. Going forward, ICRA expects CIL's profitability to remain under pressure owing to intense competition which is likely to lead to modest cash accruals in the medium term. CMM Infraprojects Limited is a public limited company engaged in construction of office buildings, school buildings, staff quarters, residential complexes, commercial complexes, group housing societies, hostels etc. for various clients in public and private sectors. CIL was promoted by Mr. Kishan Mundra, who has been carrying out the construction business since 1997, under a partnership firm. CIL began operations in FY2006 when all the assets and liabilities of the partnership firm were transferred in the books of CIL. In FY2009 as per provisional numbers provided by the company, it achieved a turnover of INR 290.9 million and a PAT of INR 0.94 million. DY UPPAR: ICRA Assigns 'LB+' Rating on INR350MM Fund Based Limits ----------------------------------------------------------------- ICRA has assigned an LB+ rating to the INR350 million fund based limits of DY Uppar. ICRA's rating takes into account the relatively high business risks arising out of the high competitive intensity of the construction industry and high sectoral, geographical and client concentration risks of DYU. The rating also takes into account DYU's high gearing on account of the debt funded capital expenditure and high working capital intensity and its stretched liquidity profile. DYU is largely involved in executing irrigation projects in the state of Karnataka for water utilities namely Karnataka Neeravari Nigam Ltd., Krishna Bhagya Jala Nigam Ltd. and Cauvery Neeravari Nigam Ltd. and this exposes the firm to any slowdown in new orders by these departments. Further, due to erratic payment by these agencies, the firm has lumpy cash flows which leads to tight liquidity conditions. This has also caused delays by the firm in meeting its debt obligations towards the lenders in the past. High working capital intensity, the debt funded capital expenditure in FY2008, and regular drawings by the proprietor have together led to high gearing for the firm (3.6 times as on March 31, 2009). Further, the rating takes into account the limited number of projects in the current order book which increases the revenue volatility on account of any possible delays in these projects. However, the rating draws comfort from long track record of the proprietor in the business of civil construction in Karnataka, robust profitability of DYU and lower possibility of execution delays and geographical surprises given the short execution cycle of the projects. About DY Uppar DY Uppar is a sole proprietorship with more than 36 years of experience in civil construction in Karnataka. The firm is promoted by Mr. D. Y. Uppar, age 65 years, who has long experience in the construction space, mainly in irrigation segment in the state of Karnataka. The firm is a registered Class I contractor with the Karnataka PWD, which allows the firm to bid for the largest projects of the Karnataka PWD. KANDAGIRI SPINNING: CARE Assigns 'CARE BB' Rating on Bank Debts --------------------------------------------------------------- CARE has assigned 'CARE BB' rating to the Long-term Bank Facilities of Kandagiri Spinning Mills Limited aggregating INR110.06 crore. Facilities with this rating are considered to offer inadequate safety for timely servicing of debt obligations. Such facilities carry high credit risk. Further, CARE has assigned a 'PR4' rating to the Short-term Bank Facilities of KSL aggregating INR9.40 crore. This rating is applicable for facilities having tenure up to one year. Facilities with this rating would have inadequate capacity for timely repayment of short-term debt obligations at the time of rating and carry very high credit risk. Such facilities are susceptible to default. CARE assigns '+' or '-' signs to be shown after the assigned rating (wherever necessary) to indicate the relative position within the band covered by the rating symbol. Rating Rationale The ratings are constrained by weak financial risk profile as evidenced by high gearing, tight liquidity and low RoCE, unfavorable industry scenario and consequent losses in FY09, KSL's presence solely in the spinning segment which leads to volatile earnings, and poor power supply situation in Tamil Nadu, where the company's facilities are located. The rating also takes into account the reschedulement of loan and the circumstances which necessitated the same. The rating also factors in KSL's established track record along with promoter's vast experience in the cotton spinning industry, its diverse products which offer various counts of yarn and value additions, synergies of operations with group firm (Sambandam Spinning Mills Ltd) and the longstanding relationship with customers and ginners. About Kandagiri Spinning KSL was originally incorporated in 1976 and became public limited company in 1992. The company belongs to 'Sambandam' Group of Salem, Tamil Nadu and is engaged in textile spinning with an aggregate capacity of 67388 spindles and 552 rotors spread among three units manufacturing cotton yarn of various counts. For the year ended March 31, 2008, KSL posted a PAT of INR4.58 cr on a total income of INR82.20 cr. The company reported a net loss of INR2.51 cr on a total income of INR85.85 cr as per provisional financials for the year ended March 31, 2009. With poor cash generation from operations in FY09 and tight liquidity position as a result, the company had to approach its bankers for reschedulement of the loans. Though reschedulement has offered some respite in the short term, continuation of adverse market conditions would be challenging. At the same time, promoter's vast experience and the diverse product offering is expected to help the company reclaim the margins and generate sufficient cash flow to effect an improvement in its financial risk profile. NAGAR KOPARGAON: ICRA Places 'LB+' Rating on LT Bank Facilities --------------------------------------------------------------- ICRA has assigned an LB+ rating to the long term sanctioned bank limits of Nagar Kopargaon Infrastructure Private Limited. The rating is constrained, among other factors, by the funding risk arising out of a delay in disbursement of funds due to a delay in securing debt tie-up for the project and potential cash flow mismatches associated with debt repayment. Ram Infrastructure Limited (rated LB+ by ICRA), the parent company of NKIPL, has provided a corporate guarantee for the debt availed by NKIPL. The rating also takes into account a certain provision in the concession agreement which allows for the downward revision in toll rates by 10% by Government of Maharashtra (GoM) once during the concession period. The rating, however, draws comfort from the limited execution risk of the project and the fact that the project corridor is an important route with substantial established traffic without any significant alternate routes. Nagar Kopargaon Infrastructure Private Limited is a Special Purpose Vehicle formed by RIL in May 2007 to undertake the project of four laning of a stretch of State Highway (S.H.) No. 10 in Maharashtra from Kolhar to Ahmednagar. Currently, RIL has a 99.97% shareholding in NKIPL. The project was awarded by GoM, Public Works Department (PWD) on a Build Operate and Transfer (BOT) basis with a concession period of 10 years 4 months and 3 days commencing from May 2007. As per the 30 month construction period of the project, the scheduled Commercial Operation Date (COD) is November 2009. The length of the project corridor is 55.50 km. The total project cost is estimated as INR1.49 billion which is to be funded by INR932 million of debt and INR564 million of equity i.e. in a debt to equity ratio of 1.65:1. TATA MOTORS: May Sell Up to 15% Stake in Vehicle Financing Unit --------------------------------------------------------------- Tata Motors Ltd may sell about 10% to 15% equity stake in its subsidiary Tata Motors Finance to raise funds for reducing its debt, The Economic Times reports citing two persons familiar with the development. The Times said the stake sale in its vehicle financing unit could likely fetch Tata Motors about INR200 crore, which would value the wholly-owned subsidiary at about INR1,300 crore to INR2,000 crore. Tata Capital, the group's finance arm, could buy the stake from Tata Motors, the report said. According to the Times, Tata Motors said it would sell equity stakes in various subsidiaries as part of a plan to reduce the company's INR24,000-crore debt. Separately, the Business Standard reports that Tata Motors raised INR236.5 crore on September 14 by selling nearly half of its current investment in group firm Tata Steel Ltd. The Standard says the company sold five million shares of Tata Steel to group holding firm Tata Sons for INR473 a share. Tata Motors earlier in June sold 11 million shares of Tata Steel to Tata Sons for INR457 crore, the Standard relates. Tata Motors now holds 5.44 million shares of Tata Steel. About Tata Motors India's largest automobile company, Tata Motors Limited -- http://www.tatamotors.com/-- is mainly engaged in the business of automobile products consisting of all types of commercial and passenger vehicles, including financing of the vehicles sold by the company. The company's operating segments consists of Automotive and Others. In addition to its automotive products, it offers construction equipment, engineering solutions and software operations. TML is listed on the Bombay Stock Exchange, the National Stock Exchange of India and New York Stock Exchange. It was ultimately 33.4% owned by the Tata Group as of December 2007. Tata Motors has operations in Russia and the United Kingdom. * * * As reported in the Troubled Company Reporter-Asia Pacific on Aug. 6, 2009, Standard & Poor's Ratings Services said that it had lowered its long term corporate credit rating on India-based Tata Motors Ltd. to 'B' from 'B+'. The outlook is negative. At the same time, Standard & Poor's lowered the issue rating on the company's senior unsecured notes to 'B' from 'B+'. Both ratings were removed from CreditWatch, where they were placed with negative implications on December 18, 2009, and refreshed in March 2009. TATA STEEL: May Refinance Around US$900-Mln Corus Debt ------------------------------------------------------ Tata Steel Ltd may refinance around US$900 million that it had raised to partly fund its acquisition of Anglo-Dutch steel maker Corus in 2007, Dow Jones Newswires reports citing a person familiar with the matter. "The company is yet to decide on the modalities of the refinancing," the person told Dow Jones Newswires, asking not to be named. Dow Jones relates that Tata Steel had raised US$875 million via a foreign currency convertible alternative reference securities offering, or CARS, for its US$12 billion Corus acquisition. The CARS expires in 2012, the report notes. At the time of issuance in 2007, says Dow Jones, the Tata Group company had said that the CARS will be convertible into either qualifying securities or ordinary shares at an initial conversion price of 876.6225 rupees (US$18.225) a share. On May 15, 2009, the Troubled Company Reporter-Europe, citing Times of India, reported Tata Steel UK, a wholly owned subsidiary of Tata Steel Ltd, sought an easing on the terms of the loans as the economic slowdown could hit its earnings, straining its ability to service the loan. The TCR-Europe reported June 2, 2009, that Tata Steel UK got approval from banks to ease conditions on GBP3.7 billion of loans it took to buy Corus. The revised covenant did not include any additional finance from the lenders or rescheduling of debt servicing commitments. About Tata Steel UK Limited Tata Steel UK Limited is the 100% subsidiary of Tata Steel Ltd, and is the holding company for its European steel operations, which principally consists of the Corus group. About Tata Steel Limited Headquartered in Mumbai, India, Tata Steel Limited -- http://www.tatasteel.com/-- is a diversified steel producer. It has operations in 24 countries and commercial presence in over 50 countries. Its operations predominantly relate to manufacture of steel and ferro alloys and minerals business. Other business segments comprises of tubes and bearings. On April 2, 2007, Tata Steel UK Limited (TSUK), a subsidiary of Tulip UK Holding No.1, which in turn is a subsidiary of Tata Steel completed the acquisition of Corus Group plc. Tata Metaliks Limited, which is engaged in the business of manufacturing and selling pig iron, became a subsidiary of the Company with effect from February 1, 2008. In September 2008, the Company acquired a 7.3% interest in Riversdale Mining Ltd. * * * As reported in the Troubled Company Reporter-Asia on June 10, 2009, Moody's Investors Service downgraded the corporate family rating of Tata Steel Ltd to Ba3 from Ba2. Moody's said the rating outlook is stable. VASANTHA SPINNERS: ICRA Rates INR327 Million Term Loans at 'LBB' ---------------------------------------------------------------- ICRA has assigned an LBB rating to the INR327 million term loans and INR 165 million cash credit facilities of Vasantha Spinners Limited indicating inadequate-credit-quality. ICRA has also assigned an A4 rating to the INR20 million fund based facilities and INR14 million non-fund based facilities of VSL indicating risk-prone-credit-quality in the short term. The ratings are constrained by the modest scale of operations of the company, stretched capital structure, sluggish demand for yarn on account of economic slowdown, volatility in raw material costs affecting operating margins and surplus capacities in a fragmented industry structure restricting pricing flexibility. The ratings favorably factors in the experience of promoters and management in cotton trading/procurement activities and spinning businesses, proximity to cotton growing areas and low power and labor costs. About Vasantha Spinners Vasantha Spinners Limited, incorporated in 2005, is primarily engaged in production of cotton yarn. VSL has spinning facilities located in Guntur District; project was set up with the support of the Technology Upgradation Fund Scheme (TUFS) of the Central Government. Commercial production started from Jan 29th, 2007 with capacity of 26,400 spindles and the company started operating at full capacity from August, 2007 onwards. The company enhanced its production capacity by 25% i.e. it added 6,720 spindles from April, 2009 onwards. Hence current capacity stands at 33,120 spindles. The company produces cotton yarn in counts ranging from 38s to 60s for both knitting as well as weaving segments with 70% in combed and 30% in carded variety. The Company"s objective is to set up an integrated textile unit with backward integration into ginning and forward integration into processing and weaving activities. As per unaudited results for FY 2009, company had sales of INR429.6 million with operating margin at 21.2 % with Profit before tax of INR 34.3 million. ================= I N D O N E S I A ================= BANK CENTRAL: Moody's Raises Foreign Cur. Deposit Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK CIMB-NIAGA: Moody's Raises Foreign Cur. Deposit rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK DANAMON: Moody's Raises Foreign Cur. Deposit Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK INTERNASIONAL: Moody's Raises For. Cur. Deposit Rating to Ba3 ------------------------------------------------------------------ Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK MANDIRI: Moody's Raises Foreign Cur. Deposit Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK NEGARA: Moody's Raises Foreign Cur. Deposit Rating to Ba3 -------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK PERMATA: Moody's Raises Foreign Cur. Deposit Rating to Ba3 --------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. BANK RAKYAT: Moody's Raises Foreign Cur. Deposit Rating to Ba3 -------------------------------------------------------------- Moody's Investors Service has changed the credit ratings of 10 Indonesian banks. Specifically, Moody's has lowered the global local currency deposit ratings to Baa3 from Baa2 for the four state-owned banks - Bank Mandiri, Bank Negara Indonesia, Bank Rakyat Indonesia and Bank Tabungan Negara. The revised ratings carry stable outlooks. At the same time, Moody's has confirmed the Baa3 GLC deposit ratings for six banks - Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Permata and Pan Indonesia Bank -- with stable outlooks. In addition, Moody's has raised the foreign currency long-term deposit ratings to Ba3 from B1 for all 10 banks. The revised ratings carry stable outlooks. The banks are Bank Central Asia, Bank CIMB-Niaga, Bank Danamon Indonesia, Bank Internasional Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Permata, Bank Rakyat Indonesia, Bank Tabungan Negara and Pan Indonesia Bank. Furthermore, Moody's has raised the foreign currency issuer ratings for Bank Central Asia, Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2 and the foreign currency subordinated debt ratings for Bank CIMB-Niaga and Bank Internasional Indonesia to Ba1 from Ba2. The revised ratings carry stable outlooks. The rating actions are attributable to two factors. First, to conclude the review initiated on May 20, 2009 to examine the systemic support assumption used in Moody's Joint-Default Analysis application. These actions are part of a Moody's global initiative and therefore do not reflect any deterioration in Indonesia's macro-fundamentals nor any change in the government's behavior towards the banking system. Second, the rating changes also incorporate similar actions taken on Indonesia's sovereign ratings on September 16, 2009. Specifically, these ratings were raised: foreign currency and local currency government bond to Ba2 from Ba3; foreign currency deposit ceiling to Ba3 from B1 and the foreign currency bond ceiling to Ba1 from Ba2. See press release of September 16, 2009, for greater discussion on sovereign issues. Beatrice Woo, Moody's Vice President and Senior Credit Officer, explains the rating actions below. Change in Systemic Support Indicator for JDA In May 2009, Moody's commented on its global review of the support capacity of a government and a central bank for its banking system in the special comment titled "Financial Crisis More Closely Aligns Bank Credit Risk and Government Ratings in Non-Aaa Countries." Consistent with the analytical criteria specified in that report and in light of Indonesia's current situation and future prospects, Moody's has concluded that the systemic support input for Indonesian bank ratings be changed to Baa3 from Baa2, the former being two notches above Indonesia's local currency government debt rating of Ba2. Accordingly, Indonesian bank ratings are affected as the input is applied in the JDA application. In Moody's view, Indonesia has a highly supportive banking framework, evidenced by government behavior towards the banks during the 1997 Asian financial crisis as well as during this current downturn. As early as September 2008, the government had been proactive in establishing support measures to stabilize and provide liquidity to the banking system. Among its programs are an increase in the maximum amount of deposits insured to IDR2 billion from IDR100 million, the eligibility of current credits as collateral for short-term liquidity facilities, and the lowering of minimum reserve requirements for Indonesian rupiah and foreign currency. In addition, the government has secured USD5.5 billion in contingent lines of support from the Asian Development Bank, World Bank and others. In the Special Comment, Moody's points out that the appropriate reference rating for the capacity of a national government to provide support to banks in a prolonged and widespread crisis would be aligned with or constrained by the government's own debt rating. However, Moody's also believes that this rating could be adjusted, usually positively, to reflect the non-fiscally dependent measures that many central banks and governments can deploy to support banks. In deciding whether the local currency-denominated deposits of a bank can be rated higher than the local currency-denominated debt issued by the national government due to systemic support, Moody's considers a number of factors for each banking system. These are the size of the banking sector relative to the government's resources, the level of stress in the banking system and in the economy, the foreign currency obligations of the banking system relative to the government's own foreign currency resources, political and historical patterns, and the possibility of any drastic shift in government priorities. With regard to Indonesia, the banking system is not large, as shown by the ratio of banking assets equaling 47% of GDP. This ratio has halved from that during the 1997 crisis. For the 10 Moody's rated banks, their creditworthiness is modest, as measured by their weighted average bank financial strength rating (BFSR) of D. These banks account for close to two thirds of system deposits. At the same time, the level of credit stress in the banking system has increased moderately following the worldwide recession. The system non-performing loans ratio inched up to 4.06% at July 2009 from 3.2% at end-2008. Furthermore, rapid loan growth -- averaging 20% annually over the past five years -- could be a potential source of higher credit costs. However, the banks have adequate capital buffer for their rating ranges; system capital adequacy ratio was 17.34% at July 2009. In addition, the foreign currency obligations of the banking system -- 14% of liabilities -- are not stretched. As 99% of this funding comprises deposits, this source is regarded as more stable. Finally, the political and historical patterns for assessing Indonesia as a highly supportive banking framework are compelling. During the 1997 crisis, the government issued a blanket guarantee which covered banks' liabilities in Indonesian rupiah and foreign currency for both depositors and creditors. Since 2004, small banks have been closed and one bank recently liquidated, but they are insufficiently significant to cause a systemic stress. Furthermore, the banking landscape is concentrated at the large end, with the top 10 banks -- out of a total of 122 players -- controlling nearly two thirds of system deposits. In Moody's opinion, this structure provides huge incentives for the government to support the banks. In conclusion, the Baa3 systemic support input for Indonesian banks is two notches above the Ba2 local currency government debt rating. The uplift is predicated on Moody's view that the risk of a system-wide banking crisis is low and that the likelihood of the government "ring-fencing" its own fiscal position from the banking system is medium. The last rating actions on all 10 banks were taken on May 20, 2009 when their global local currency deposit ratings were placed on review for possible downgrade. At the same time, the Ba2 foreign currency subordinated debt ratings of Bank CIMB-Niaga and Bank Internasional Indonesia were placed on review for possible downgrade. Bank Central Asia, headquartered in Jakarta, had assets of IDR255.1 trillion at June 2009. Bank CIMB-Niaga, headquartered in Jakarta, had assets of IDR102.1 trillion at June 2009. Bank Danamon Indonesia, headquartered in Jakarta, had assets of IDR98.9 trillion at June 2009. Bank Internasional Indonesia, headquartered in Jakarta, had assets of IDR52.0 trillion at June 2009. Bank Mandiri, headquartered in Jakarta, had assets of IDR358.9 trillion at June 2009. Bank Negara Indonesia, headquartered in Jakarta, had assets of IDR203.6 trillion at June 2009. Bank Permata, headquartered in Jakarta, had assets of IDR54.0 trillion at June 2009. Bank Rakyat Indonesia, headquartered in Jakarta, had assets of IDR268.0 trillion at June 2009. Bank Tabungan Negara headquartered in Jakarta, had assets of IDR48.7 trillion at June 2009. Pan Indonesia Bank, headquartered in Jakarta, had assets of IDR71.2 trillion at June 2009. Detailed Ratings And Actions * Bank Central Asia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and issuer to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank CIMB-Niaga: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Danamon Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Internasional Indonesia: GLC deposit of Baa3 was confirmed with a stable outlook. These ratings were raised: foreign currency long-term deposit rating to Ba3 from B1 and foreign currency issuer/ subordinated debt to Ba1 from Ba2. The revised ratings carry stable outlooks. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D; * Bank Mandiri: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short- term deposit of Not Prime and BFSR of D-; * Bank Negara Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Permata: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; * Bank Rakyat Indonesia: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D+; * Bank Tabungan Negara: GLC deposit was lowered to Baa3 from Baa2. The revised rating carries a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D-; and * Pan Indonesia Bank: GLC deposit of Baa3 was confirmed with a stable outlook. The foreign currency long-term deposit rating was raised to Ba3 from B1. The revised rating carries a stable outlook. All other ratings are unaffected and carry stable outlooks: foreign currency short-term deposit of Not Prime and BFSR of D. PT INDIKA: Consent Solicitation Won't Affect Fitch's 'B' Ratings ---------------------------------------------------------------- Fitch Ratings has said that the bondholder consent solicitation process launched by PT Indika Energy Tbk., if accepted by noteholders of the US$250 million notes due 2012 issued by Indo Integrated Energy BV and guaranteed by Indika, does not immediately affect its Issuer Default Rating of 'B' with Positive Outlook and the notes' issue rating of 'B'. A key amendment proposed by the company is to allow the use of US$60 million earmarked previously for the purchase of a majority stake in a restricted coal-related subsidiary can also be used now to purchase a majority stake in a coal related company that could be unrestricted. However, the ratings impact of these amendments can be only assessed once there is greater clarity on Indika's future investment plans. Indika had a cash balance (excluding short-term investments and restricted cash) of IDR 2.5 trillion (approx. US$244 million) at end June 2009 and intends to continue expanding in the energy sector. Indika's ratings are supported primarily by the strength of its 46% stake in PT Kideco Jaya Agung, a leading coal mining company in Indonesia, which provides it with a strong dividend inflow (US$96.6 million in 2008). PT INDIKA: Consent Solicitation Won't Affect Moody's 'B2' Rating ---------------------------------------------------------------- Moody's Investors Service sees no immediate impact on PT Indika Energy Tbk's B2 corporate family rating and the senior secured bond issued by Indo Integrated Energy BV and guaranteed by Indika -- or its stable ratings outlook, as a result of the recently announced consent solicitation. Indika has proposed to amend certain terms in its bond indenture to allow it to, inter alia, to make a potential investment in a coal company; remove ambiguity regarding dividend flows from Kideco and calculations under the restricted basket calculations; as well as address a technical breach surrounding its investment in PT Cotrans Asia. "For the time being, Moody's does not foresee any material adverse impact on operating or financial metrics as a result of the proposed amendment to the bond indenture," says Laura Acres, a Moody's Vice President. "However, the amendment paves the way for Indika to look for investment opportunities which will provide synergies with its existing business. The potential acquisition may have an impact on Indika's credit profile if it requires substantial equity and debt financing. Moody's will only be able to assess the final impact on Indika's ratings when the target coal company has been identified and the terms and funding structure of the transaction have been incorporated into Indika's consolidated financial profile," adds Acres, also Moody's lead analyst for Indika. Indika's ratings were assigned by evaluating factors Moody's believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Indika's core industry and Indika's ratings are believed to be comparable to those of other issuers of similar credit risk. The last rating action was taken on 27th February 2009 when Moody's affirmed Indika's corporate family and senior secured bond ratings at B2 following the announcement of the proposed acquisition of Petrosea. Indika is an integrated energy group based in Indonesia listed on the Jakarta Stock Exchange. Its principal investment is its 46% shareholding in PT Kideco Jaya Agung, Indonesia's third largest domestic coal producer and one of the world's lowest-cost producers and exporters of coal. In addition, Indika is involved in Engineering, Procurement and the Construction and Operation and Maintenance businesses through its wholly-owned subsidiary Tripatra. Tripatra is an established EPC and O&M contractor with a long track record of successfully completed projects for major international oil companies within Indonesia. Indika has also recently acquired a 98.55% stake in Petrosea, a mining services operator based in Kalimantan. ========= J A P A N ========= AIFUL CORP: Seeks to Reschedule Loan Payments --------------------------------------------- Bloomberg News reports that Aiful Corp. said it will try to reschedule loan payments after the financial crisis hurt its ability to raise money. Citing Aiful in a statement to the Tokyo Stock Exchange on Friday, Bloomberg says the company had difficulty raising funds following the credit squeeze. Stricter regulation of consumer lenders is also likely to hurt the company, Bloomberg notes. Credit Ratings Downgrade As reported in the Troubled Company Reporter-Asia Pacific on September 16, 2009, Standard & Poor's Ratings Services placed its 'BB' long-term counterparty credit and senior unsecured debt ratings on Aiful Corp. and its 'BB+' long-term counterparty credit and senior unsecured debt ratings on Takefuji Corp. on CreditWatch with negative implications. The CreditWatch listing reflects S&P's view that the financial cash flows of both companies have been squeezed due to the severe financing environment. In addition, the companies' operating cash flows have deteriorated due to reduced operating assets and refunds of overpaid interest, which remain at an elevated level. At the same time, Standard & Poor's affirmed its 'B' short-term counterparty credit rating on Aiful. As of June 30, 2009, Aiful's consolidated debt amounted to JPY826.6 billion, of which JPY415.3 billion was scheduled to be repaid within one year. The financing environment remains difficult due to refunds of overpaid interest and uncertainty surrounding the implementation of the revised Money Lending Business Law in mid-2010. Although the company's debt has been decreasing, Standard & Poor's believes that Aiful needs to reduce its operating assets so that it can accelerate debt repayments. Consequently, the company's operating cash flow may decline further as earnings from assets could decline. The TCR-AP reported on July 14, 2009, that Fitch Ratings downgraded Aiful Corporation's Long-Term foreign and local currency Issuer Default Ratings to 'BB' from 'BBB-', and its Short-term foreign and local currency IDRs to 'B' from 'F3'. The Outlooks remain Negative. The ratings on Aiful's senior unsecured notes have also been downgraded to 'BB' from 'BBB-'. About Aiful Aiful Corporation (TYO:8515) -- http://www.ir-aiful.com/-- is a Japan-based financial service provider. The company is engaged in the provision of small-lot uncollateralized loan for individual consumers, business loan for individuals, as well as mortgage collateral and credit card services, in addition to the collection and management of debts. Other business activities the Company is involved in include the development, investment and nurture of venture companies, as well as the leasing of real estates. Headquartered in Kyoto, the Company has 29 subsidiaries and two associated companies. HUIS TEN: Nomura Principal in Talks with HMI on Capital Infusion ---------------------------------------------------------------- Nomura Principal Finance Co. is in talks with Hotel Management International Co. to seek financial assistance for its struggling subsidiary Huis Ten Bosch Co., Kyodo News reports citing sources close to the matter. Kyodo notes the sources said the investment arm of Nomura Holdings Inc and HMI are seeking to reach an agreement by the end of this month on capital subscription for Huis Ten. Nomura Principal is also eying the transfer of operations of Huis Ten Bosch in Sasebo, Nagasaki Prefecture, Kyodo relates. Headquartered in Nagasaki Japan, Huis Ten Bosch is a popular theme park, which imitates Holland villages. It is located in Kyushu. It is a fun place for travelers to experience the exotic culture and atmosphere of Europe. The Troubled Company Reporter - Asia Pacific reported on July 5, 2004, that The Tokyo District Court approved Huis Ten Bosch Co.'s rehabilitation plan under the support of Nomura Principal Finance Co., an investment firm controlled by Nomura Holdings Inc. Huis Ten Bosch inked a rehabilitation sponsorship contract with Nomura Principal in December 2003. JAPAN AIRLINES: Bankruptcy Not An Option for JAL, Minister Says --------------------------------------------------------------- Kyodo News reports that Japan's new transport minister Seiji Maehara on Thursday said that bankruptcy is not an option for struggling Japan Airlines Corp., which is currently under a state- supervised rehabilitation process. Kyodo News relates Mr. Maehara said in a news conference that JAL and All Nippon Airways Co. must remain as the two pillars of Japan's aviation industry. According to the report, Mr. Maehara also indicated that the new government led by the Democratic Party of Japan would accelerate efforts to rehabilitate JAL, saying, "The time left for us for the rehabilitation of JAL is limited." The Troubled Company Reporter said on Sept. 15, 2009, that AMR Corp. and Delta Air are reportedly in separate talks with Japan Airlines to forge an expansive joint venture with the carrier. The Wall Street Journal said that American Airlines would also consider taking a minority stake in JAL, although any such investment would likely be capped at hundreds of millions of dollars. Delta is also negotiating to acquire a minority stake of around US$300 million in JAL. The Journal related that Delta wants JAL to join its rival SkyTeam alliance. About Japan Airlines Japan Airlines Corporation -- http://www.jal.co.jp/-- is a Japan- based holding company that is active in five business segments through its 225 subsidiaries and 82 associated companies. The Air Transportation segment is engaged in the operation of passenger and cargo planes. The Air Transportation-Related segment is engaged in the transportation of passengers and cargoes, the preparation of in-flight food catering, the maintenance of aircraft and land equipment, as well as the fueling business. The Travel Planning and Marketing segment is involved in the planning and sale of travel packages. The Card and Leasing segment is engaged in the provision of finance, cards and leasing services. The Others segment is involved in businesses related to hotels, resorts, logistics, wholesale, retail, real estate, printing, construction, manpower dispatch, as well as information and communication. The Company has numerous global operating locations. JAL International Co. Ltd. is a wholly owned operating subsidiary of Japan Airlines Corporation. * * * As reported in the Troubled Company Reporter-Asia Pacific on February 11, 2009, Moody's Investors Service changed the outlook on the Ba3 long-term debt rating and issuer rating of Japan Airlines International Co. Ltd. to negative from positive. The outlook change reflects Moody's view that JALI's profitability is likely to remain pressured amid the recent sharp decline in airline passenger demand. Japan Airlines continues to carry Standard & Poor's Ratings 'B+' LT Foreign & Local Issuer Credit. The outlook is positive. MAZDA MOTOR: China Sales May Rise 40% in July-September, CFO Says ----------------------------------------------------------------- Bloomberg News, citing the Nikkei newspaper, reported that Mazda Motor Corp.'s Chief Financial Officer Kiyoshi Ozaki said the company' vehicle sales in China may increase 40% during the July- September period from the year before. According to Bloomberg, the newspaper said company sold about 70,000 vehicles in the country during the April- August period, up 29% on the year. Headquartered in Hiroshima Prefecture, in Japan, Mazda Motor Corporation -- http://www.mazda.co.jp/-- together with its subsidiaries and associates, is primarily involved in the manufacture and distribution of automobiles. The company manufactures passenger cars and commercial vehicles. Mazda Motor distributes its products in both domestic and overseas markets. The company has 58 subsidiaries. It has overseas operations in the United States, Canada, Mexico, Germany, Belgium, France, the United Kingdom, Switzerland, Portugal, Italy, Spain, Austria, Russia, Columbia, New Zealand, Thailand, Indonesia and China. The company has a global network. * * * As reported in the Troubled Company Reporter-Asia Pacific on March 23, 2009, Standard & Poor's Ratings Services revised to negative from stable the outlook on its 'BB' long-term corporate credit rating on Mazda Motor Corp., reflecting increased pressure on the company's profitability and cash flow amid ongoing turbulence in global auto markets. At the same time, Standard & Poor's affirmed its long-term corporate credit and 'BB+' senior unsecured debt ratings on Mazda. SANYO ELECTRIC: Expects to Post Second Annual Loss in FY2010 ------------------------------------------------------------ Sanyo Electric Co. will have a second straight group net loss for the year ending March 2010 because of costs to repair washing machines and to restructure the company, Bloomberg News reports citing Nikkei English News. The Troubled Company Reporter-Asia Pacific reported on May 18, 2009, that Sanyo Electric is expecting a breakeven in fiscal year ending March 31, 2010, after posting a net loss of JPY93.2 billion in the 12 months ended March 31, 2009. According to Bloomberg, the company was hurt by the JPY10 billion cost of an inspection and repair program for washing machines after one caught fire. Headquartered in Osaka, Japan, Sanyo Electric Co. Ltd. -- http://www.sanyo.com/-- is one of the world's leading manufacturers of consumer electronics products. The company has global operations in Brazil, Germany, India, Ireland, Spain, the United States and the United Kingdom, among others. * * * As reported in the Troubled Company Reporter-Asia Pacific on November 14, 2008, Fitch Ratings placed Sanyo Electric Co. Ltd.'s 'BB+' Long-term foreign and local currency IDRs and senior unsecured ratings on Rating Watch Positive. ==================== N E W Z E A L A N D ==================== WINDFLOW TECHNOLOGY: Annual Loss Narrows to NZ$1.23 Million ----------------------------------------------------------- Windflow Technology reported a net loss of NZ$1.23 million for the year ended June 30, 2009, compared with a net loss of NZ$2.04 million in the prior year. Consolidated revenue for the year was NZ$29.52 million, compared with NZ$10.991 million for the year ended June 30, 2008. The net result for the parent company for the second six months of the year was a net loss of NZ$0.372 million compared to a net loss of NZ$1.082 million for the first six months. The preliminary announcement has been based on financial statements for the year to June 2009 that are in the process of being audited. There are two issues that are currently unresolved, which have the potential to raise matters of Fundamental Uncertainty: * Windflow's main customer, NZ Windfarms Ltd, has placed unconditional orders for turbines but has recently withheld payments and asserts it has a contractual right to do so (an assertion which Windflow does not accept). If NZ Windfarms were to continue to withhold payments, then Windflow could have major cash flow issues. * NZ Windfarms has released its own preliminary announcement in which it stated that “while the [NZ Windfarms] Board is confident in the Company's ability to continue as a going concern, there is uncertainty with respect to achieving the operational cash flows predicted and the raising of additional funding prior to utilisation of available cash resources. Accordingly, there is uncertainty as to whether the Company can continue as a going concern and therefore whether it will be able to pay its debts as and when they become due and payable”. If NZ Windfarms can not raise additional funding then Windflow could have major cash flow issues. Windflow's financial statements have been prepared using the assumption that Windflow is a going concern. If the going concern assumption were not appropriate, then the amounts at which items are recorded in the financial statements could change significantly. Windflow's directors believe that the going concern assumption is appropriate because: (a) Windflow has obtained an independent review of the contractual position with NZ Windfarms which review has given the directors comfort over Windflow's position; and (b) The NZ Windfarms Board has expressed confidence in NZ Windfarms' ability to continue as a going concern. Outlook Total revenue in the year to June 30, 2010, is expected to exceed the revenue for the year to June 30, 2009, based on confirmed orders for the remainder of the Te Rere Hau project. In addition there are prospects for further turbine sales. However, it is uncertain as to whether the revenue will reach Windflow's general target for healthy profitability. This is because of a number of factors which have created uncertainty about the immediate prospects for turbine sales. The factors include: a) Delays in obtaining resource consents for a number of prospective sites for the Windflow 500, including Mt Cass (declined by Hurunui District Council but currently being appealed), Long Gully and the Te Rere Hau extension; b) Delays in completing the final documentation for IEC Type Certification; c) Policy uncertainty about the price of carbon in the New Zealand economy; d) Electricity market uncertainty as the industry faces another round of structural reforms; and e) General economic uncertainty because of the current recession. A full-text copy of the Company's Preliminary Full Year Report is available for free at http://ResearchArchives.com/t/s?450d About Windflow Christchurch, New Zealand-based Windflow Technology Limited -- http://www.windflow.co.nz/-- is engaged in wind power development. As of June 30, 2006, the company held a 20% shareholding in Windpower Otago Limited. The principal activity of Windpower Otago Limited is the development of wind farms. During the fiscal year ended June 30, 2006 (fiscal 2006), Windflow Technology Limited, held a 42.99% shareholding in NZ Windfarms Limited. The principal activity of NZ Windfarms Limited is the development of wind farms. Its other subsidiaries and associates include Pacific Windfarms Limited, Wind Blades Limited and Windpower Maungatua Limited. * * * Windflow Technology incurred a net loss of NZ$3.28 million in the financial year ended June 30, 2007, compared with the INR2.22-million loss booked in the prior financial year. The company posted a net loss of NZ$2.04 million for the year ended June 30, 2008. ********* Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Asia Pacific is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland, USA. Valerie C. Udtuhan, Marites O. Claro, Rousel Elaine C. Tumanda, Joy A. Agravante, Frauline S. Abangan, and Peter A. Chapman, Editors. Copyright 2009. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. TCR-AP subscription rate is US$625 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***