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Moody’s assigns B1 rating to Sritex notes
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Sritex workers complete tasks at the company's factory in Sukoharjo, Surakarta, Central Java. (JP/Nani Afrida)
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atings agency Moody’s Investor Service has assigned a B1 rating to PT Sri Rejeki Isman’s (Sritex) senior notes worth US$150 million, issued by the publicly listed textile manufacturer’s subsidiary Golden Legacy Pte Ltd.
The company will use the proceeds to pay existing senior unsecured notes worth $89.3 million that will mature in 2019, its $30 million medium-term notes due in October this year and existing working capital loans.
“The successful completion of a Sritex tender offer and notes issuance will extend its debt maturity profile, with the company's next major maturity of $350 million coming due only in 2021,” Moody’s vice president and senior analyst Brian Grieser said in a statement on Monday.
The positive outlook, he added, reflected Moody’s expectation that Sritex’s earnings would benefit from the strong demand for the textile and garment industries this year. “Further, the positive outlook anticipates improved earnings and lower capital spending supporting positive free cash flow in 2017,” he said.
The rating can be upgraded within the next 12 months if Sritex maintains its stable operating and financial profile, with cash flows from operations exceeding capital spending. (ecn/ags)
