Moody’s rates Sritex notes B1

Moody’s Investors Service said it assigned a provisional B1 rating to the proposed senior unsecured notes to be issued by Golden Legacy Pte. Ltd.

The notes will be unconditionally and irrevocably guaranteed by PT Sri Rejeki Isman Tbk. (Sritex).

Sritex’s corporate family rating is B1.

The outlook is positive.

The proceeds from the proposed notes will be used to repurchase the existing $270 million senior unsecured notes due 2019. The existing notes are rated B1 and are issued by Golden Legacy, Moody’s said.

The company’s leverage is expected to remain at about 3.7x pro forma for the transaction, the agency said.

Sritex’s ratings reflect its relatively small scale in the highly competitive global textile industry, geographic concentration of assets in Indonesia’s central Java region and manageable debt-to-EBITDA leverage of about 3.7x as of March 31, Moody’s said.

The ratings also consider Sritex’s solid EBITDA margins, strong trends in earnings growth, track record of executing on its large, debt-funded capital spending program and sales diversification, the agency said.

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