Moody’s assigns B1 to Soechi notes

Moody's Investors Service said it affirmed the B1 corporate family rating of PT Soechi Lines Tbk.

At the same time, the agency assigned a senior unsecured bond rating of B1 to the guaranteed senior notes to be issued by Soechi Capital Pte. Ltd., a wholly owned subsidiary of Soechi. The proposed notes are unconditionally and irrevocably guaranteed by Soechi and its subsidiary guarantors, who own all of Soechi's vessels and its shipyard.

The outlook is stable.

Proceeds will be used to repay all outstanding debt and fund the interest reserve account.

"The affirmation of the B1 corporate family rating reflects Moody's expectation that recent vessel acquisitions and a high exposure to term vessel charters will restore revenue and earnings growth in 2017 and support the maintenance of financial leverage, as measured by adjusted debt-to-EBITDA, between 4.0x-4.5x over the next 12-18 months," Moody's vice president and senior credit officer Brian Grieser said in a news release.

"The rating also reflects positively the high barriers to entry created by cabotage laws in Indonesia (Baa3 positive), which mandate the use of Indonesian-flagged vessels for domestic sea freight transportation, and the benefits of a strong and long-standing relationship with Indonesia's national oil and gas company, Pertamina (Persero) P.T. (Baa3 positive)."

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