Fitch Ratings has lowered PT Pan Brothers Tbk PBRX's issuer default rating (IDR) to 'RD' from 'C.'

Quoting Fitch Ratings research, Tuesday (15/3), Fitch has also affirmed PBRX's unsecured bond rating of US $ 171 million with maturity in January 2022 issued by PB International BV at 'C' with the Recovery Rating on fixed bonds at 'RR4'.

At the same time, Fitch Ratings Indonesia has downgraded PBRX's National Long-Term Rating to 'RD (idn)' from 'C (idn).'

The downgrade to 'RD' follows the default event that occurred due to default on several bank facilities and the standstill agreement period's expiration on February 12, 2021.

"There has not been an extension to the standstill that has been agreed upon simultaneously by all syndicated and bilateral banks to date, although discussions continue," Fitch said in a written report.

Therefore, banks can choose to accelerate repayments on bilateral loans and syndicated loans totaling US$138.5 million.

This default also resulted in a default on PBRX bonds amounting to US$171.1 million, which will mature in January 2022. However, Pan Brothers can only accelerate the payment of bonds if it gets approval from at least 25% of bondholders, which has not happened until now.

Pan Brothers continues to negotiate with banks regarding an extension of the standstill period from February 12, 2021, to the end of March 2021 but has not yet received formal approval from all banks.