Moody’s affirms Sime Darby

Moody's Investors Service said it affirmed the Baa1 issuer rating of Sime Darby Plantation Sdn Bhd. and Baa1 senior debt rating on the sukuk issued by Sime Darby Global Bhd., concluding the review for downgrade that began Feb. 3. The outlook is stable.

The review began after Sime Darby Global’s previous obligor, Sime Darby Bhd., announced plans to demerge and list its plantation and property businesses separately on Bursa Malaysia.

On May 23, Sime Darby Bhd. announced the completion of the cash repurchase of $627.9 million sukuk, out of $800 million, issued by Sime Darby Global Bhd. and the novation of the remaining $172.1 million sukuk – $49.6 million due 2018 and $122.5 million due 2023 – and change in obligor from Sime Darby Bhd. to Sime Darby Plantation.

Moody’s said the cash repurchase of the tendered sukuk was funded by a $430 million bridge facility at Sime Darby Plantation's level and with cash balances of Sime Darby Bhd. Hence, the amount of debt allocated to Sime Darby Plantation totaled about $600 million.

The ratings affirmation reflects that the debt allocation on the dollar sukuk and the drawdown of bridge financing remains in line with the agency’s expectation, such that the company is on track to achieve improvement in its financial metrics over the next 12 to 18 months.

© 2015 Prospect News.
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