PT Japfa Comfeed Downgraded To 'B' On Deteriorating Cash Flow Adequacy, Eroding Liquidity; Outlook Negative

We project that the margins and cash flows of Japfa will be substantially below our earlier expectation in 2015. The cash flow adequacy could also remain weak if tough conditions in Indonesia's poultry sector persist. Japfa's liquidity is also eroding because of weaker operating cash flows and higher short-term debt. We are lowering our long-term corporate credit rating on Japfa and the long-term issue rating on the company's guaranteed senior unsecured notes to 'B' from 'B+'. We are also lowering our long-term ASEAN regional scale rating on the Indonesia-based integrated poultry producer to 'axB+' from 'axBB'. The negative outlook reflects Japfa's eroding liquidity and increasingly unfavorable debt maturity profile. The outlook also reflects the prospects that the company's FFO interest

...+ We project that the margins and cash flows of Japfa will be substantially below our earlier expectation in 2015. The cash flow adequacy could also remain weak if tough conditions in Indonesia's poultry sector persist. + Japfa's liquidity is also eroding because of weaker operating cash flows and higher short-term debt. + We are lowering our long-term corporate credit rating on Japfa and the long-term issue rating on the company's guaranteed senior unsecured notes to 'B' from 'B+'. We are also lowering our long-term ASEAN regional scale rating on the Indonesia-based integrated poultry producer to 'axB+' from 'axBB'. + The negative outlook reflects Japfa's eroding liquidity and increasingly unfavorable debt maturity profile. The outlook also reflects the prospects that the company's FFO interest coverage may not recover toward 3.0x over the next 12 months if operating conditions remain tough. SINGAPORE (Standard & Poor's) July 31, 2015--Standard & Poor's Ratings Services said today that...

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