Sime Darby Plantation’s Baa1 rating, reaffimed by Moody’s
SINGAPORE: Moody’s Investors Service yesterday affirmed the Baa1 issuer rating for Sime Darby Plantation Sdn Bhd (SDP) .
At the same time, Moody’s also confirmed the (P)Baa1 rating on the US$1.5 billion (US$1=RM4.30) senior unsecured medium-term note programme of Sime Darby Global Bhd and the Baa1 senior unsecured debt rating of its sukuk issuance.
The Moody’s ratings outlook was stable.
With the rating exercise, Sime Darby Global concluded the review for downgrade initiated on Feb 3, 2017, after its previous obligor, Sime Darby Bhd announced plans to demerge and list its plantation and property businesses separately on Bursa Malaysia.
On May 23, 2017, Sime Darby announced a completion of the cash repurchase of US$627.9 million sukuk, out of US$800 million issued by Sime Darby Global.
The cash repurchase of the tendered sukuk was funded by a US$430 million bridge facility.
Hence, the amount of debt allocated to SDP totaled about US$600 million.
“The affirmation of SDP’s Baa1 ratings reflects that the debt allocation on the US dollar sukuk and the drawdown of bridge financing remains in line with our expectation, such that the company is on track to achieve improvement in its financial metrics over the next 12-18 months,” said Moody’s Vice-President and Senior Analyst Jacintha Poh in a statement.
Moody’s expects SDP’’s total adjusted debt to reach around betwen RM9.5 billion and RM10.2 billion in the financial year ending June 30, 2017 (FY2017) and FY2018, down from around RM14.2 billion in FY2016.
“The confirmation of Sime Darby Global’’s ratings follows the successful change in its obligor, such that it is now a wholly-owned subsidiary of SDP, instead of Sime Darby,” added Poh.
The rating outlook is stable, reflecting Moody’s expectation that SDP would successfully term out the US$430 million bridge financing and the management would maintain a prudent and conservative approach towards further investments as the company pursued growth. — Bernama