Fitch pares Pan Brothers

Fitch Ratings said it downgraded PT Pan Brothers Tbk.’s long-term issuer default rating to CC from CCC-. Fitch also lowered its $171 million of unsecured notes due January 2022, issued by PB International BV, to CC from CCC- with the recovery rating remaining at RR4. Concurrently, Fitch Ratings Indonesia downgraded PB’s national long-term rating to CC(idn) from CCC-(idn).

The downgrade reflects the looming refinancing risks of its $138.5 million loan facility due Jan. 27, Fitch said. Pan Brothers is still negotiating with the banks to finalize the new terms and extend the loan facility.

A $350 million bond issuance plan, which is key to its refinancing strategy, may face a delay, the agency said. The Indonesian Financial Services Authority ordered Pan Brothers to postpone an extraordinary general meeting that was to be held Wednesday to seek shareholders’ approval.

“We believe these events have led to a higher level of credit risk, raising the probability of an event of default or some form of debt exchange,” Fitch said in a press release.

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