Fitch Ratings' international rating agency has lowered the debt rating for the manufacturing company PT Pan Brothers Tbk (PBRX) to C from previously CC.

The cuts were aimed at Pan Brothers' long-term credit rating and debt securities worth US$ 171 million issued by the company's subsidiary, PB International B.V. At the same time, Fitch Ratings also downgraded Pan Brothers' national long-term credit rating to C from previously CC.

"This downgrade comes after Pan Brothers announced that the company proposed a temporary suspension of interest payments or a standstill agreement with creditors, which is in accordance with Fitch's C rating definition," said Fitch in its latest report, on Wednesday (3/2).

Meanwhile, the temporary suspension of interest payments will end on January 27, 2021. After that, the banks will collect the syndicated loan worth US$ 138.5 million from PBRX.

PBRX reports that the company is currently in the process of extending the postponement period of interest payments until February 12, 2021.

Meanwhile, Fitch's national C rating reflects the potential initial default of companies in the standstill agreement period.