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Fitch acts on palm oil producers
Fitch Ratings said it took negative rating actions across its coverage of palm-oil producers in Indonesia and Malaysia after completing a portfolio review. Fitch forecasts a significant drop in palm oil prices.
Fitch downgraded PT Sawit Sumbermas Sarana Tbk. ’s long-term foreign-currency issuer default rating to CCC+ from B-, and the $300 million of 7¾% senior notes due 2023 issued by its subsidiary, SSMS Plantation Holdings Pte. Ltd., to CCC+ from B-, with a recovery rating of RR4. Fitch also downgraded SSMS’s national long-term rating to BB-(idn) from BBB-(idn). The outlook is stable.
The agency revised the outlook for Sime Darby Plantation Bhd.’s long-term issuer default rating to negative from stable and affirmed all ratings at BBB. The negative outlook reflects the risk that the coronavirus pandemic may further delay SDP’s assets disposal plans.
Fitch affirmed PT Tunas Baru Lampung Tbk.’s long-term issuer default rating at B+, but revised the outlook to negative from stable. The rating on the $250 million of 7% senior unsecured notes due 2023, issued by wholly owned subsidiary TBLA International Pte. Ltd. and guaranteed by Tunas Baru and all its majority-owned operating subsidiaries has also been affirmed at B+ with a recovery rating of RR4. Fitch also revised the outlook on the national long-term rating to negative from stable and at the same time affirmed the rating at A(idn).
Fitch also downgraded the national long-term ratings of PT Sinar Mas Agro Resources and Technology Tbk. PT Ivo Mas Tunggal and PT Sawit Mas Sejahtera to A-(idn) from A(idn). The outlook is stable.
“The ratings for the three entities, which are based on the consolidated profile of Golden Agri-Resources Ltd., have been downgraded based on Fitch’s expectation that although GAR’s net debt-to-EBITDA leverage will decline from the 2019 level of over 8x, the ratio will remain above our previous threshold for negative rating action of 5.5x over the next three years,” Fitch said.
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