Moody's affirms Bakrie Sumatera

Moody's Investors Service said it affirmed the B2 senior secured debt rating for Bakrie Sumatera Plantations Tbk following its decision to increase the existing bond size of $110 million by another $45 million. Moody's also affirmed its B2 corporate family rating.

The outlook is stable.

The increased bond amount will fund the company's acquisition of new oil palm plantations. These acquisitions will give Bakrie Sumatera another 15,000 hectares of oil palm estates and more mills capacity, the agency said.

The proposed debt-funded acquisitions will increase its debt leverage and will weaken its credit metrics, which will position the company at the lower limits of the current B2 rating, Moody's said.

Nevertheless, the B2 rating is supported by both favorable demand for crude palm oil and Bakrie Sumatera's established operations, Moody's said. Moreover, the acquisitions will increase the company's plantation size and maintain the prime production age of the company's oil palm plantation, the agency added.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.