SINGAPORE (Yosefardi) – Moody’s Investors Service has affirmed the B1 corporate family rating of PT Berau Coal Energy Tbk (BRAU) as well as the senior secured ratings of bonds issued the group, but at the same time changed the outlook for the ratings to negative from stable.
“The change in outlook reflects our expectation that Berau’s credit metrics will come under additional pressure, because of weak thermal coal prices. Prices are unlikely to recover significantly over the next 12 to18 months,” says Simon Wong, a Moody’s Vice President and Senior Credit Officer.
According to the rating agency, seaborne thermal coal prices have fallen by more than 15% since the start of the year, as low cost producers increased production volumes to maximize cash flows from operations while lowering production levels per unit.
“Consequently, Moody’s has revised downwards its forecast for the Newcastle benchmark thermal coal price in 2013, to $80-$85 per ton from $90-95 per ton. In addition, Moody’s expects that supply will continue to outstrip demand into 2014, which in turn will suppress the price of thermal coal,” the company said Friday.
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