Moody's rates Cikarang Listrindo notes Ba2

Moody's Investors Service said it assigned a Ba2 corporate family rating to PT Cikarang Listrindo and a provisional Ba2 rating to the senior secured notes to be issued by Listrindo Capital BV, which will be guaranteed by Cikarang.

The outlook is stable.

Proceeds will be used to repay bank loans and to fund Cikarang's capacity expansion program and for general corporate purposes.

"Cikarang's ratings reflect its exclusive IPP license for providing electricity to a large and diversified base of industrial estate customers, its offtake agreement with PLN (Ba2/stable), as well as track records of solid demand growth and payment records from the industrial estate customer base, even during the Asian financial crisis in 1997 and the more recent economic slowdown," Jennifer Wong, a Moody's analyst, said in a statement.

"The ratings also reflect the company's strong reliability, strong operating performance, and its robust tariff structure - which allows for foreign exchange and natural gas cost pass-through - and its strong management team," Wong said.

"At the same time, the ratings are constrained by its offtake risk exposure to PLN and a moderate degree of uncertainty regarding the extent of demand for the additional capacity that will come from its expansion program."

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