S&P cuts Chandra Asri Petrochemical

S&P said it lowered the ratings on PT Chandra Asri Petrochemical Tbk. and its senior unsecured notes to B+ from BB-. The agency also placed the ratings on CreditWatch with negative implications.

The action follows the company’s parent PT Barito Pacific Tbk. recent raise of an added term loan of $253 million for investment, which the agency hadn't anticipated, increasing the burden on Barito's already leveraged balance sheet, S&P said.

“Barito's weaker credit quality reduces its ability to provide extraordinary financial support to CAP. As Barito's debt grows and its liquidity erodes, we no longer view Barito as having the financial capacity to provide extraordinary financial support to CAP, if needed. As a result, we no longer apply a one-notch uplift in CAP's stand-alone credit profile,” S&P said in a press release.

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