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Moody’s cuts Indika Energy, notes to B2
Moody's Investors Service said it downgraded Indika Energy Tbk.'s corporate family rating to B2 from B1.
At the same time, the agency downgraded the ratings on the $300 million notes due 2018 and the $500 million notes due 2023, issued by Indo Energy Finance BV and Indo Energy Finance II BV, respectively, to B2 from B1.
The two issuers are wholly owned subsidiaries of Indika. The notes are unconditionally guaranteed by Indika.
The outlooks remain negative.
"The ratings downgrade to B2 reflects our view that Indika's operating performance will continue to deteriorate throughout 2015 and 2016 as weak coal prices weigh on the group's pricing power and operating margins," Moody's vice president and senior analyst Brian Grieser said in a news release.
"We expect lower earnings generation plus higher debt levels, largely attributable to growth in Indika's low margin coal trading business, will drive its adjusted debt-to-EBITDA above 6.0x for 2015 and 2016."
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