Moody's upgrades Perusahaan Gas Negara

Moody's Investors Service said it upgraded the rating of PT Perusahaan Gas Negara to Baa3 from Ba1 and revised the outlook to stable from positive.

The corporate family rating was withdrawn and simultaneously replaced with an issuer rating.

The agency said the upgrade is mainly driven by Perusahaan Gas Negara's good pricing power with a track record of cost pass through, favorable industry dynamics that offer strong growth potential and a solid financial profile that is constrained by upstream business expansion.

"Although Perusahaan Gas Negara is ambitious in seeking to expand its upstream business, thereby increasing its capex and execution risk, we recognize the long-term benefits of this strategy as it will help diversify its business and supply sources," Ray Tay, a Moody's associate vice president and analyst, said in an agency news release.

"Perusahaan Gas Negara's solid financial profile as well as its management strategy and investment criteria somewhat mitigate the execution risks."

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