Standard and Poor's (S&P) Global Ratings took rating actions on nine companies in Indonesia and the bonds they issued or guaranteed by them. Photo-Privacy.

JAKARTA (TheInsiderStories) – Along with the increase in Indonesia’s long-term debt rating, Standard and Poor’s (S&P) Global Ratings took rating actions on nine companies in Indonesia and the bonds they issued or guaranteed by them. The actions follow the upgrade of Indonesia (BBB/Stable/A-2) and the revision of Indonesia risk assessment for the country.

In S&P view, Indonesia has solid growth prospects, and it expects stable policy making over the coming years. Six Indonesian companies received a rise in rank by S&P include PT Perusahaan Listrik Negara (PLN), PT Pertamina, and PT Pelabuhan Indonesia (Pelindo) II, PT Pelabuhan Indonesia (Pelindo) III, PT Cikarang Listrindo Tbk (IDX: POWR), and PT Astra International Tbk (IDX: ASII).

Two companies got a change in the outlook for ratings from negative to stable. Both are PT Perusahaan Gas Negara Tbk (IDX: PGAS) and its subsidiary PT Saka Energi Indonesia (SAKA). While one company, namely PT Jasa Marga Tbk (IDX: JSMR), was confirmed its rating by S&P.

Ratings List

Upgraded
Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara
Issuer Credit Rating BBB/Stable/– BBB-/Stable/–
Senior Unsecured BBB BBB-
Majapahit Holding B.V.
Senior Unsecured BBB BBB-
PT Pertamina (Persero)
Issuer Credit Rating BBB/Stable/– BBB-/Stable/–
Senior Unsecured BBB BBB-
PT Pelabuhan Indonesia II (Persero)
Issuer Credit Rating BBB/Stable/– BBB-/Stable/–
Senior Unsecured BBB BBB-
PT Pelabuhan Indonesia III (Persero)
Issuer Credit Rating BBB-/Stable/– BB+/Stable/–
Senior Unsecured BBB- BB+
PT Cikarang Listrindo Tbk.
Issuer Credit Rating BB+/Stable/– BB/Stable/–
Listrindo Capital B.V.
Senior Unsecured BB+ BB
PT Astra International Tbk.
Issuer Credit Rating
Foreign Currency BBB+/Stable/– BBB/Stable/–
Ratings Affirmed; Outlook Action
PT Perusahaan Gas Negara Tbk.
Issuer Credit Rating BBB-/Stable/– BBB-/Negative/–
PT Saka Energi Indonesia
Issuer Credit Rating BB+/Stable/– BB+/Negative/–
Ratings Affirmed
PT Jasa Marga (Persero) Tbk.
Issuer Credit Rating BB+/Stable/–
Senior Unsecured BB+
PT Astra International Tbk.
Issuer Credit Rating
Local Currency BBB+/Stable/–
PT Perusahaan Gas Negara Tbk.
Senior Unsecured BBB-
PT Saka Energi Indonesia
Senior Unsecured BB+

 

We raised the ratings on PLN and Pertamina because we believe these companies will continue to play a critical role for the Indonesian government and they will benefit from ongoing and almost certain extraordinary government support. The stable outlook on these companies reflects the outlook on the sovereign rating on Indonesia, the agency said.

We upgraded Pelindo II and Pelindo III to reflect these companies’ sensitivity to the sovereign credit rating on Indonesia, given their close relationship with the government and very high likelihood of support. We have also revised our assessment of the stand-alone credit profile (SACP) of Pelindo II to ‘bbb-‘ from ‘bb+’, and of Pelindo III to ‘bb+’ from ‘bb’. This is based on our view that Indonesia’s more stable economic conditions will support these companies’ better earnings quality and lower volatility in cash flows, it said.

The stable outlook on Pelindo II reflects S&P expectation that the company will maintain its ‘bbb-‘ SACP supported by its healthy operating cash flows despite high capital expenditure. The stable outlook on Pelindo III reflects the outlook on the sovereign rating on Indonesia.

We raised the rating on POWR because we believe the company is well positioned to benefit from Indonesia’s solid growth prospects. This is given POWR’s captive market position and the improved credit quality of its counterparties such as PLN. The stable outlook on POWR reflects our expectation that the company will maintain stable cash flows, moderate leverage, and have efficient operations over the next 12-18 months, it said.

We raised the foreign currency rating on ASII because we revised the transfer and convertibility assessment for Indonesia to ‘BBB+’ from ‘BBB’. This assessment previously constrained the foreign currency rating on Astra. The stable outlook on Astra mirrors the outlook on the sovereign, the agency said.

We revised our assessment of ASII’s SACP to ‘a-‘ from ‘bbb+’ because we believe the company will continue to benefit from Indonesia’s faster economic growth and stable policymaking. ASII’s conservative financial position and the reduced risk in the asset portfolio of its captive finance companies also supports its SACP, it said.

We revised the outlook on PGAS and its subsidiary SAKA to stable from negative to reflect the improved ability of the Indonesia government and PGAS’s parent Pertamina to support the companies. This offsets the pressure on PGAS’s ‘bbb-‘ SACP due to the company’s cash payout for the acquisition of 51 percent of PGAS in 2018. The outlook on Saka reflects the outlook on its parent, PGAS, it said.

We lowered our assessment of JSMR’s SACP to ‘b+’ from ‘bb-‘, reflecting our expectation that the company’s financial profile will weaken over the next 12-24 months due to high capital expenditure and increasing payments to contractors on completion of toll roads. Nevertheless, we affirmed the rating because we expect JSMR to continue to benefit from a very high likelihood of government support, it said.

The stable outlook on JSMR reflects the outlook on the sovereign and our expectation that the company will manage the execution risks of its heavy capital expenditure, ramp up its new projects, and continue to benefit from timely tariff adjustments over the next 12-24 months. We also expect JSMR to maintain its strategic role in developing Indonesia’s road infrastructure and its close relationship with the government, the agency ended.

Written by Lexy Nantu, Email: lexy@theinsiderstories.com