Fitch downgrades Soechi Lines

Fitch Ratings said it downgraded PT Soechi Lines Tbk.'s long-term issuer default rating to B from B+.

Fitch also said it downgraded the rating to B from B+ on the $200 million 8 3/8% senior unsecured notes due 2023 issued by wholly owned subsidiary Soechi Capital Pte. Ltd. The recovery rating on the notes is RR4.

The notes are guaranteed by Soechi and all of its operating subsidiaries, the agency noted.

The outlook is stable.

The downgrade follows an increase in Soechi's leverage in 2018, Fitch explained.

Soechi's leverage is expected to stay higher than 4x over the next three years, indicating a weaker financial profile, the agency said.

Soechi's leverage increase in the first nine months of 2018 was due to higher shipping capital expenditure despite a flat EBITDA, both of which were worse than expectations, Fitch said.

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