Fitch applies BB- to Japfa notes

Fitch Ratings said it assigned a BB-(EXP) expected rating to PT Japfa Comfeed Indonesia Tbk.'s proposed dollar-denominated senior unsecured notes maturing in 2022.

The notes will be guaranteed by almost all of Japfa's major operating subsidiaries, and the proceeds will be used mainly to redeem dollar-denominated notes due in 2018.

Fitch said Japfa's EBITDA margin improved to 13.1% in 2016, from 9.1% in 2015, driven by more conducive market conditions. Profitability in the animal-feed segment was up, while sales of day-old chicks returned to significant profit after losses in 2014-2015. Japfa's net debt-to-EBITDA leverage dropped to 0.9 times, from 2.6 times.

The agency estimates leverage will remain at around 1.5 times, assuming the EBITDA margin narrows from 2017. It also expects Japfa to continue to generate FCF over the next three years, with a healthy fixed-charge coverage averaging over 4 times.

© 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.