Moody's lowers Sawit Sumbermas view to negative

Moody's Investors Service said it affirmed the B1 corporate family rating of PT Sawit Sumbermas Sarana Tbk., along with the B1 senior unsecured rating on the $300 million notes issued by its wholly owned subsidiary, SSMS Plantation Holdings Pte. Ltd.

Moody's also said it revised the outlook to negative from stable.

The change in outlook reflects an expectation that SSMS Plantation's credit metrics will remain weak for its B1 ratings over the next 12- to 18-months in light of higher-than-expected borrowings and the limited likelihood of a material increase in earnings through organic growth, the agency said.

The company's credit metrics will remain materially outside of the range for the ratings in the absence of debt reduction or an earnings accretive acquisition, Moody's said.

The ratings reflect the credit quality of its parent, PT Citra Borneo Indah, the agency noted.

Citra's credit metrics have weakened in recent years due to elevated capital spending on construction a palm oil refinery and industrial park, Moody's said.

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