Indonesia Corruption Crackdown Adds to Strains on Junk Bonds
- Slumping rupiah, bribery case drag bonds to near record lows
- S&P says Lippo Karawaci faces liquidity and cash-flow issues
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A bribery probe at major Indonesian developer PT Lippo Karawaci has prompted investors to ask if more companies might get caught in the government’s anti-corruption campaign.
That’s adding to broader strains on the nation’s junk bonds, which have already been hit harder than Asian peers in the recent emerging-market sell-off as the rupiah tanks. The timing couldn’t be worse, as funding costs are rising ahead of a wall of maturing debt that must be refinanced in coming years.