Moody’s: Tower Bersama, TBG views to negative

Moody's Investors Service said it changed the outlooks for Tower Bersama Infrastructure Tbk. (TBI) and TBG Global Pte. Ltd. to negative from stable.

Concurrently, the agency affirmed Tower Bersama’s Ba2 corporate family rating and the Ba3 ratings on the $300 million senior unsecured notes of TBG Global, a wholly owned subsidiary of Tower Bersama. Tower Bersama unconditionally and irrevocably guarantees the notes.

"The negative outlook reflects our expectation that in the absence of significant recapitalization, or a substantial uptick in EBITDA, TBI's adjusted gross leverage will remain above 4.0x-4.5x (based on a last 12-month historic EBITDA), through at least first half of 2016, which is higher than we expect for the Ba2 rating level," Moody's assistant vice president and analyst Nidhi Dhruv said in a news release.

Moody’s said Tower Bersama’s leverage surged to 6.3 times following its largely debt-funded acquisition of 2,500 towers in 2012 from Indosat Tbk. (PT) (Ba1 stable), and deleveraging has been slower than the agency expected, mainly due to lower collocation tenancy growth.

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