Moody's changes Lippo Karawaci's outlook to stable; affirms B3 ratings ................................................................

Page 1 of 6 © 2023 Factiva, Inc. All rights reserved.

Moody's changes Lippo Karawaci's outlook to stable; affirms B3 ratings

Moody's changes Lippo Karawaci's outlook to stable; affirms B3 ratings

3,022 words
5 January 2023
Moody's Investors Service Press Release
MOODPR
English
(c) 2023
Singapore, January 05, 2023 -- Moody's Investors Service ("Moody's") has affirmed the B3 corporate family
rating of Lippo Karawaci Tbk (P.T.).

At the same time, Moody's has affirmed the B3 backed senior unsecured rating of the bonds issued by Theta
Capital Pte. Ltd., a wholly-owned subsidiary of Lippo Karawaci. The bonds are guaranteed by Lippo Karawaci
and some of its subsidiaries.

Moody's has also changed the outlook on all ratings to stable from positive.

"The change in outlook to stable from positive reflects our expectation that Lippo Karawaci's marketing sales
will likely drop over the next 12 months as housing demand moderates on the back of higher mortgage and
inflation rates. It also takes into account the weaker-than-expected operating cash flow generation at the
holding company such that it would be marginally cash flow negative over the next 12-18 months," says
Rachel Chua, a Moody's Vice President and Senior Analyst.

"While refinancing risk is not yet imminent, the company has a large debt maturity wall with $405 million of
bonds maturing in January 2025 and another $417 million of bonds maturing in October 2026," adds Chua,
who is also the Lead Analyst for Lippo Karawaci.

RATINGS RATIONALE

Lippo Karawaci's marketing sales were IDR3.5 trillion during the first nine months of 2022 (9M 2022),
comprising IDR2.9 trillion of sales at the holding company level. Its full-year marketing sales will likely be
IDR4.7 trillion-IDR4.8 trillion, lower than its original target of IDR5.2 trillion.

Given weaker macroeconomic conditions and Lippo Karawaci's focus on the mass-market residential
segment, Moody's estimates Lippo Karawaci's marketing sales in 2023 will likely fall 5% year-on-year to
IDR4.5 trillion-IDR4.6 trillion.

Around 60% of Lippo Karawaci's marketing sales during 9M 2022 are from projects held at the holding
company level. Moody's expects the proportion to remain the same over the next two years. A dependence
on asset sales to boost operating cash flows would be credit negative.

Lippo Karawaci's liquidity at the holding company level will be good over the next 12-18 months. As of 30
September 2022, Lippo Karawaci had cash and cash equivalents of IDR2.8 trillion at the holding company
level, which will be more than sufficient to fund its negative operating cash flow of around IDR40 billion in
2023. Lippo Karawaci will also have sufficient cash to repay its short-term loan facilities, although the
company will likely continue to roll over the loans and keep a larger cash buffer.

Moody's expects operating cash flow (excluding land sales to third parties) at the holding company level will
be marginally negative in 2023 despite continued cash collection from its strong marketing sales over the past
two years, as well as lower construction spending following the completion of its legacy projects. However, its
dividend cash flows have declined. While Lippo Karawaci's key operating subsidiaries, 58%-owned Siloam
International Hospitals Tbk (P.T.) has and will continue to pay dividends, the 84%-owned Lippo Cikarang
(P.T.) did not pay dividends in 2022.

In terms of environmental, social and governance (ESG) risks, Moody's has considered Lippo Karawaci's
weak execution track record, which resulted in liquidity pressure that was relieved by an IDR11.2 trillion rights
issue backed by the Riady family in 2019. The current management team, led by John Riady, was put in
place following the rights issue. Over the past three years, this management team met all the milestones it set
in 2019, but the track record remains short.

Page 2 of 6 © 2023 Factiva, Inc. All rights reserved.

Moody's has also considered the founding family's concentrated ownership of Lippo Karawaci. However, this
risk is mitigated by the oversight exercised through the presence of strategic minority shareholders on the
board and partially balanced by support from its key shareholder.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Moody's could upgrade Lippo Karawaci's rating if (1) the company improves its core property development
business, such that operating cash flow at the holding company level is positive without relying on any one-off
asset sales; (2) the company reduces debt at the holding company level; (3) liquidity stays good over the next
12-18 months and (4) the company addresses its refinancing requirements through January 2025.

Moody's could downgrade Lippo Karawaci's rating if (1) operating cash flow deteriorates at the holding
company level and refinancing risk heightens, weakening liquidity; and (2) there are signs of cash leakage
from Lippo Karawaci to affiliated companies, for example, through intercompany loans, aggressive cash
dividends or investments in affiliates. The senior unsecured bond rating could also be downgraded if debt is
incurred at its subsidiaries.

The principal methodology used in these ratings was Homebuilding and Property Development published in
October 2022 and available at https://ratings.moodys.com/api/rmc-documents/394515. Alternatively, please
see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Lippo Karawaci Tbk (P.T.) and its subsidiaries are engaged in the development, management and operation
of retail malls, hospitals, hotels, condominiums, and residential townships across multiple cities in Indonesia.
Lippo Karawaci also manages Lippo Malls Indonesia Retail Trust (B3 negative), a real estate investment
trust (REIT) listed on the Singapore Stock Exchange, in which it owned a 47% stake as of 30 September
2022.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections
Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols
and Definitions can be found on https://ratings.moodys.com/rating-definitions.

For ratings issued on a program, series, category/class of debt or security this announcement provides
certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same
series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively
from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation to the credit rating action on the support
provider and in relation to each particular credit rating action for securities that derive their credit ratings from
the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory
disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be
assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms
have not changed prior to the assignment of the definitive rating in a manner that would have affected the
rating. For further information please see the issuer/deal page for the respective issuer on
https://ratings.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this
credit rating action, and whose ratings may change as a result of this credit rating action, the associated
regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following
disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated
entity.

The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment
resulting from that disclosure.

These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit
Ratings available on its website https://ratings.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related
rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit
analysis can be found at https://ratings.moodys.com/documents/PBC_1288235.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates
outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322,
Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating

Page 3 of 6 © 2023 Factiva, Inc. All rights reserved.

Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit
rating is available on https://ratings.moodys.com.

The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates
outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf,
London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK
endorsement status and on the Moody's office that issued the credit rating is available on
https://ratings.moodys.com.

Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the
Moody's legal entity that has issued the rating.

Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each
credit rating.

Rachel Chua
Vice President - Senior Analyst
Corporate Finance Group

Moody's Investors Service Singapore Pte. Ltd.

71 Robinson Road #05-01/02
Singapore, 068895
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

Vikas Halan
Associate Managing Director
Corporate Finance Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
71 Robinson Road #05-01/02
Singapore, 068895
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

© 2023 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors
and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S
CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT
RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS,
PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY,
"PUBLICATIONS") MAY INCLUDE SUCH CURRENT OPINIONS. MOODY'S DEFINES CREDIT RISK AS
THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY
COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT.
SEE APPLICABLE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION
ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S CREDIT
RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO:
LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT
ASSESSMENTS ("ASSESSMENTS"), AND OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS
ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO
INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR
COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S
CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR
PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS,
OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO
PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF
AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS,
ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE

Page 4 of 6 © 2023 Factiva, Inc. All rights reserved.

EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS
OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR
PURCHASE, HOLDING, OR SALE. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS,
AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE
RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION.
IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL
INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO,
COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE
REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED,
REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN
WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY
PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS,
ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY
PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST
NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All
information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable.
Because of the possibility of human or mechanical error as well as other factors, however, all information
contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures
so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S
considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is
not an auditor and cannot in every instance independently verify or validate information received in the credit
rating process or in preparing its Publications. To the extent permitted by law, MOODY'S and its directors,
officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity
for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in
connection with the information contained herein or the use of or inability to use any such information, even if
MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is
advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of
present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not
the subject of a particular credit rating assigned by MOODY'S. To the extent permitted by law, MOODY'S and
its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any
direct or compensatory losses or damages caused to any person or entity, including but not limited to by any
negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of
doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of,
MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising
from or in connection with the information contained herein or the use of or inability to use any such
information. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS,
COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY
CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY
MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Moody's Investors Service, Inc., a wholly-owned
credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt
securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred
stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to
Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from
$1,000 to approximately $5,000,000. MCO and Moody's Investors Service also maintain policies and
procedures to address the independence of Moody's Investors Service credit ratings and credit rating
processes. Information regarding certain affiliations that may exist between directors of MCO and rated
entities, and between entities who hold credit ratings from Moody's Investors Service, Inc. and have also
publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at
www.moodys.com under the heading "Investor Relations — Corporate Governance — Charter Documents -
Director and Shareholder Affiliation Policy." Additional terms for Australia only: Any publication into Australia
of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's
Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd
ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to
"wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access
this document from within Australia, you represent to MOODY'S that you are, or are accessing the document
as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or
indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of
the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt
obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to
retail investors. Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating
agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc.,
a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency
subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO").
Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are
assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain
Page 5 of 6 © 2023 Factiva, Inc. All rights reserved.
types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan
Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3
respectively. MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including
corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK
or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as
applicable) for credit ratings opinions and services rendered by it fees ranging from JPY100,000 to
approximately JPY550,000,000. MJKK and MSFJ also maintain policies and procedures to address
Japanese regulatory requirements.

Document MOODPR0020230105ej15000b5

Search Summary: Nature and

Neon

Text nirvana wastu pratama or danny nugroho or city retail developments or nwp or retail
real estate or retail mall or pakuwon or lmirt or lippo malls or lippo reit or niro or
nirvana infrastructure or park solo or city malls indonesia or Orion Global Development
Date In the last week
Source All Sources
Author All Authors
Company All Companies
Subject All Subjects
Industry All Industries
Region Indonesia
Language English
Results Found 4
Timestamp 9 January 2023 13:09

Page 6 of 6 © 2023 Factiva, Inc. All rights reserved.