Moody's rates Star Energy notes B2

Moody's Investors Service said it assigned a B2 corporate family rating to Star Energy Geothermal (Wayang Windu) Ltd., along with a provisional B2 rating to the proposed senior secured notes to be issued by the company.

The outlook is stable.

The proceeds will be used to refinance outstanding debt under an existing bank facility, fund an interest reserve account for the bond and any excess proceeds will partially fund developmental cost related to the proposed Unit 3 expansion, the agency said.

The ratings reflect the favorable industry dynamics for geothermal energy and strong energy demand in Indonesia, Moody's said.

The ratings are constrained by a history in Indonesia of renegotiating its take or pay arrangements including with Star Energy, a degree of uncertainty regarding geothermal reserves and a lack of operational flexibility, the agency said.

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