SINGAPORE (Indonesia Today) – Standard Poor’s Ratings Services today assigned its ‘BB+’ and ‘axBBB+’ issue ratings to the proposed US$5 billion global medium-term notes program of PT Pertamina (Persero) (Pertamina). It lso assigned ‘BB+’ issue rating to a proposed issue of up to US$3.0 billion under this program.
The program and issue ratings reflect the long-term corporate credit rating on Pertamina (BB+/Stable/–; axBBB+/–). The rating on Pertamina incorporates the company’s ‘bb+’ stand-alone credit profile (SACP) and S&P’s view of an “almost certain” likelihood that the Indonesian government would provide timely and sufficient extraordinary support to Pertamina in the event of financial distress. “We assess that the company plays a “critical” role and has an “integral” link with the government of Indonesia (BB+/Stable/B; axBBB+/axA-2).”
Pertamina’s SACP reflects the company’s “fair” business risk profile and “significant” financial risk profile, as S&P criteria define the terms. S&P expects the government to continue to influence Pertamina’s business risk profile. The company benefits from generous production sharing contracts, and has preferential access to newly released exploration blocks and expiring cooperation contracts.