Fitch cuts Soechi bonds

Fitch Ratings said it downgraded the dollar-denominated notes guaranteed by PT Soechi Lines Tbk. to B- from B, and revised the recovery rating to RR5 from RR4. Fitch also removed the rating watch negative on the notes. Subsidiary Soechi Capital Pte. Ltd. issued the notes.

“The downgrade of the U.S. dollar bonds follows the expiration of Soechi’s cash tender offer to buy back a portion of the notes using proceeds from a secured loan facility, and it reflects our estimate of below-average recoveries (less than 31%) for the outstanding bonds as Soechi will replace the majority of the unsecured notes with proceeds from the new secured loan in its capital structure,” Fitch said in a press release.

Fitch placed on RWN on Dec. 1, after the launch of the tender. Soechi will draw from its $180 million secured term loan facility to pay 70 cents per dollar of the tendered notes later in December. It will also pay accrued interest from its cash balance, the agency said.

Concurrently, Fitch affirmed Soechi’s long-term issuer default rating at B.

The outlook is stable.

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