Fitch rates BUMA notes BB-

Fitch Ratings said it assigned a long-term foreign-currency issuer default rating to PT Bukit Makmur Mandiri Utama (BUMA) at BB- with a stable outlook.

The agency also said it assigned an expected rating of BB- to BUMA's proposed notes.

The proceeds from the proposed notes will be used to repay the company's existing secured term loan.

The ratings reflect BUMA's market position as Indonesia's second-largest mining contractor, proven record in winning and renewing customer contracts, stable and resilient margin business and demonstrated operational flexibility, Fitch said.

The ratings are constrained by high customer concentration risk with revenue dependent on only five counterparties, the agency said.

However, the risk of a major contract falling away or not being renewed is mitigated by high contractor switching costs, Fitch added.

These customers also are among the country's highest quality coal miners with low production costs and high-grade coal resources, improving resilience in an over-supplied Asian thermal coal market, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.