Moody’s revises Pan Brothers view to negative

Moody’s Investors Service said it revised the outlook on Pan Brothers Tbk. to negative from stable.

“The change in Pan Brothers’ ratings outlook to negative primarily reflects the uncertainty associated with the refinancing of its core $138.5 million revolving credit facility due February 2021, amid more challenging credit conditions and heightened global and regional turbulence,” Stephanie Cheong, a Moody’s analyst, in a press release. “In the absence of concrete near term arrangements to refinance Pan Brothers’ core facility, the rating is likely to be subject to increasing pressure.”

Moody’s also affirmed Pan Brothers B1 corporate family rating and the B1 senior unsecured rating on the 2022 notes issued by a wholly owned subsidiary of Pan Brothers, PB International BV, and guaranteed by Pan Brothers and all its subsidiaries.

Pan Brothers’ cash balance of $64 million at Sept. 30, will be sufficient to cover its operating cash needs, planned capital spending, short-term debt repayments and projected dividends over the next 12-18 months. But the balance is insufficient to cover its $138.5 million revolving credit facility maturing in February 2021, which the company mainly uses to fund its working capital, the agency said.

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