Fitch rates TBG Global notes BB

Fitch Ratings said it assigned TBG Global Pte Ltd.'s proposed dollar-denominated guaranteed notes an expected BB(EXP) rating.

TBG Global Pte Ltd. is a finance subsidiary of Tower Bersama Infrastructure Tbk.

The notes will be unconditionally and irrevocably guaranteed by Tower Bersama but not by Tower Bersama's operating subsidiaries, which generate all of the group's revenue. Therefore, the notes will be subordinated to the operating subsidiaries' secured debt, which totaled Rp. 8.1 trillion ($834 million) at the end of December.

However, a high proportion of the group's operating cash flows are contractually locked in ($2 billion at end-December), which leads to strong creditor recovery in a distressed scenario. Therefore, despite subordination, Fitch said it believes that recovery given default on the notes would be at least average, which warrants an instrument rating at the same level as the Tower Bersama's issuer default rating.

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