Moody’s: Sime Plantation’s large debt refinancing credit positive

February 7, 2020 editor Credit Positive, Debt, Loans, Moody's, Refinancing, Sime Darby Plantations

KUALA LUMPUR: Sime Darby Plantation Bhd’s (SDP) large debt refinancing is credit positive as the move will improve the company’s liquidity and extend its debt maturities, Moody’s Investors Service said.

The rating agency said on Jan 30, SDP (Baa1 negative) announced that it had refinanced around RM3.9bil of credit facilities in December 2019, or around 49% of its total reported debt.

In total, SDP refinanced its US$760mil (RM3.1bil) foreign currency loans, which previously had a bullet maturity in June 2020, with new amortising term loans.

SDP also refinanced RM800mil working capital facilities with new term loans, which have longer maturities. SDP announced that the new facilities offer slightly lower interest rates than its previous facilities, though specific details were not disclosed.

“Pro forma for the refinancing, we estimate SDP’s short-term debt as a proportion of total debt declined to around 28% from 77% as of Sept 30,2019, ” it said.

Source: TheStar