Moody's affirms Davomas

Moody's Investors Service said it affirmed its B2 senior secured bond rating for Davomas International Finance Co. Pte Ltd., which is guaranteed by PT Davomas Abadi Tbk, following the company's decision to increase the secured bond size by $25 million. At the same time, Moody's said it affirmed its B2 corporate family rating for Davomas.

The outlook is stable.

This $25 million senior secured bond will share the same terms and conditions as the company's $125 million senior secured bond issued in June 2006 and the bond proceeds will be used for the purchase of a power generation set for production facilities and for general purposes, Moody's said.

While Davomas is exposed to a cyclical commodity pricing trend, the agency said the company has a back-to-back purchasing and sourcing strategy that largely hedges against price risk.

But considering the commodity nature of cocoa products, the company's ongoing large working capital requirements, absence of back-up banking facilities and track record of default, Moody's said the rating is appropriately positioned at the B2 level.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.