Moody’s cuts Soechi Lines

Moody’s Investors Service said it downgraded Soechi Lines Tbk.’s corporate family rating to B2 from B1. Moody’s also downgraded to B2 from B1 the senior unsecured rating on the $200 million of notes issued by wholly-owned subsidiary Soechi Capital Pte. Ltd.

“The downgrade reflects our expectation that Soechi’s credit metrics will remain materially weaker than we had previously expected, driven by persistent losses at its shipyard operations,” said Stephanie Cheong, Moody’s lead analyst, in a press release.

Moody’s also forecasts Soechi’s shipyard business to continue generating operating losses through 2020-21 as it works to replenish its order book with profitable orders during the pandemic, the agency said.

“As a result, Moody’s estimates its adjusted leverage will remain elevated at 5.3x-5.9x over the next 12-18 months, which is higher than Moody’s previous expectation of 4.7x-4.9x and inconsistent with the previous B1 ratings,” the agency said.

Sochi’s $83 million syndicated loan is due next August. The company is in talks to refinance the loan.

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