Fitch lowers three palm oil firms views negative

Fitch Ratings said it revised the outlooks to negative from stable on PT Sinar Mas Agro Resources and Technology Tbk., PT Ivo Mas Tunggal and PT Sawit Mas Sejahtera.

The national long-term ratings on the three companies also were affirmed at AA(idn).

All three companies are wholly owned by Golden Agri Resources Ltd., the agency said.

Fitch also said it affirmed the issuer default rating on Sinar Mas Agro’s Rp 1 trillion bonds due in 2017 and 2019 at AA(idn).

The ratings denote expectations of very low default risk relative to other issuers or obligations in the same country, the agency said.

The default risk inherently differs only slightly from that of the country’s highest rated issuers or obligations, Fitch said.

The ratings also are based on a view that there will be prolonged pressure on commodity prices, which will keep the company’s financial leverage high until 2017, the agency said.

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