Fitch rates Soechi Lines notes B+/RR4

Fitch Ratings said it affirmed PT Soechi Lines Tbk.'s long-term issuer default rating of B+.

The outlook remains negative.

The agency also assigned a B+(EXP) expected rating with a recovery rating of RR4 to the proposed dollar-denominated senior unsecured notes to be issued by Soechi's wholly owned subsidiary Soechi Capital Pte. Ltd.

The notes will be guaranteed by Soechi and all its operating subsidiaries, and the proceeds are intended to be used mainly to refinance Soechi's existing debt.

“Soechi's key shipping business is relatively stable, supported by growing demand, a robust market position and regulatory protection. However, the shipyard segment has underperformed relative to our expectations and has been a drag on the leverage profile,” Fitch said in a news release.

“The situation is compounded by a lack of new shipbuilding contracts.

“The negative outlook factors in the risk that Soechi's FFO adjusted net leverage will remain higher than 4.0x – the level above which we would consider negative rating action – until 2018, given a lack of cash flow visibility for its shipyard business and higher-than-estimated shipping capex without a commensurate improvement in EBITDA,” the agency added in the release.

© 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.