Fitch rates Sritex notes BB-

Fitch Ratings said it assigned an expected rating of BB- to PT Sri Rejeki Isman Tbk.’s (Sritex) proposed dollar-denominated five-year senior unsecured notes.

The notes will be issued by Sritex’s wholly owned subsidiary, Golden Legacy Pte. Ltd., and guaranteed by Sritex and its operating subsidiaries, Fitch said.

The proceeds will be used to refinance its existing debt, including its existing $270 million five-year 9% guaranteed senior unsecured notes due in 2019, the agency said.

The proposed bond is rated at the same level as Sritex’s BB- long-term issuer default rating, Fitch said.

The company has relatively small operating scale compared with its international peers in the competitive and fragmented textile sector, the agency said.

However, the company has significantly expanded its production such that EBITDA is expected to grow by more than 50% at the completion of the investment cycle, Fitch said.

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