Moody's rates Golden Agri-Resources Ba3

Moody's Investors Service said it assigned a Ba3 corporate family rating to Indonesia-based Golden Agri-Resources Ltd. The outlook is stable.

The agency said Golden Agri-Resources' key credit strengths are its position in the Indonesian oil palm plantation market, its vertically integrated business model - which partially buffers it against volatility in prices for crude palm oil - and the favorable state of demand for crude palm oil, which is being driven by organic growth in other Asian countries and the oil's application over the longer term as a bio-fuel.

However, the rating is constrained at the current Ba3 level by a history of debt restructuring at the company's subsidiaries and related group companies controlled by the Widjaja Family, Moody's said. Such incidents had in the past impaired Golden Agri-Resources' ability to acquire access to the bank funding market. Moreover, there is a likelihood for the company to rely on external facility lines over the next two years to fund its capex and maturing debts.

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