RAM Rating reaffirms ratings of F&N Capital’s debt facility
KUCHING: Rating Agency Malaysia Bhd ( RAM Rating) has reaffirmed the respective longand short-term ratings of AA1(s) and P1(s) for F& N Capital Sdn Bhd’s ( F& N Capital) RM1 billion Commercial Papers/ MediumTerm Notes Programme.
According to a statement, the long-term rating carried a stable outlook. F& N Capital is a treasury company that is wholly- owned by Fraser & Neave Holdings Bhd (F& N Holdings).
The CP/ MTN was backed by a full, unconditional and irrevocable corporate guarantee from F& N Holdings. As such, the ratings were based on the credit profi le of the group.
The ratings predominantly reflected F& N Holdings’ strong leading position in several food and beverage segments and its solid fi nancial profi le.
F& N Holdings remained a leader in the overall ready to drink market in Malaysia. Likewise, the group had retained its leadership of the Malaysian and Thai dairyproducts markets, it said.
Its financial profile had also stayed sturdy despite the loss of its bottling licence from The CocaCola Company and operational disruptions as a result of severe floods in Thailand.
As at end fi rst quarter fi nancial year September 2013, the group carried a heavier debt load as its cashflow had been affected by the two aforesaid operational setbacks which had necessitated more debt to fund increased working capital requirements at that time.
Consequently, F& N Holdings’ gearing ratio had risen from 0.11 to 0.25 times while its funds from operations debt cover had eased from 2.15 to 0.89 times as at end December 2012. Nonetheless, these levels were still considered robust, opined RAM Rating.
Going forward, the group’s financial profile was expected to remain solid. Consistent with its plans over the last two years, F& N Holdings had allocated some RM500 million of investment outlay for potential acquisitions and a corresponding debt drawdown of the same amount.