Moody's cuts IOI view to negative

Moody's Investors Services said it revised the outlook of IOI Corp. Bhd.'s A3 foreign-currency issuer and bond ratings to negative from stable. The action follows news of the company's plan to issue $600 million of exchangeable bonds to fund the expansion of its palm oil downstream operations.

The negative outlook reflects IOI's aggressive debt-funded growth appetite, which has raised its financial risk at a time when the palm oil cycle is nearing its peak, Moody's said.

The outlook could return to stable if the company demonstrates financial prudence in its growth strategy while at the same time reducing its overall debt level, the agency said.

Downgrade pressure could emerge if continuous pressure on IOI's downstream operation's profit margins results in a declining trend in the company's overall profitability, Moody's added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.