S&P lifts Japfa Comfeed on refinancing

S&P said it raised the long-term corporate credit rating on PT Japfa Comfeed Indonesia Tbk. to BB- from B+.

The outlook is stable.

The agency also said it raised the Asean regional scale rating on the company to axBB+ from axBB and the issue rating on its guaranteed senior unsecured debts to BB- from B+.

The agency also said it removed all of ratings from CreditWatch with positive implications, where they were placed March 20.

S&P also said it affirmed the BB- long-term foreign-currency corporate credit rating on PT Japfa's new $150 million senior unsecured bond due in March 2022.

The agency said it raised the ratings to reflect PT Japfa's lengthened debt-maturity profile and reduced refinancing risk following its recent fundraising transaction.

The bond proceeds will be used, in conjunction with an issuance of Rp 1 trillion under a medium-term note program, to call remaining outstanding bonds of about $200 million, S&P explained.

Even though the transaction slightly increases leverage compared with earlier expectations, the company's weighted average maturity has been extended out four years, compared with less than two years as at Sept. 30, 2016, the agency said.

PT Japfa's refinancing has taken place amid a generally more favorable industry environment, marginally improved demand and supply balance, low commodity prices, stronger Indonesian rupiah, reduced capital spending and debt reduction, S&P said.

As a result of a more solid operating environment, the company's cash flow adequacy and leverage ratios have strengthened since 2014, the agency said.

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