S&P cuts Sawit Sumbermas Sarana

S&P said it trimmed its issuer rating for PT Sawit Sumbermas Sarana Tbk. to CCC from CCC+, citing refinancing concerns.

“The downgrade reflects that SSMS has yet to refinance its $300 million bond, which matures in about nine months. This is despite our understanding that the company has made significant progress in discussions with major banks in Indonesia. However, we believe the timing as to the execution and completion remains uncertain,” S&P said in a press release.

The agency warned it does not expect SSMS to deliver the cash flow necessary to repay its upcoming $300 million bond maturity in full. The bonds constitute 66% of SMSS' capital structure and are trading at a steep discount to par.

The outlook is negative.

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