Fitch rates Perusahaan Gas bonds BBB-

Fitch Ratings said it assigned a final rating of BBB- to PT Perusahaan Gas Negara's senior unsecured $1.35 billion bonds.

The assignment of the final rating is in line with the expected rating assigned May 2 and follows a review of final documentation materially conforming to the draft documentation previously reviewed, the agency said.

The notes are rated at the same level as the company's issuer default rating of BBB- because they will constitute direct, unconditional and senior unsecured obligations of the company, Fitch said.

The proceeds from the bond issue will be used for the company's capital expenditure and general corporate purposes, the agency said.

The company said it expects to increase its investments in upstream oil and gas assets over the medium term in order to secure its supply of natural gas, Fitch said.

The ratings are a notch below its standalone credit profile of BBB because they are constrained by the rating on its 57% majority shareholder, the Republic of Indonesia, the agency said.

The ratings reflect its dominant market position in natural gas distribution in Indonesia, strong pricing power and adequate financial flexibility to accommodate expected investments in upstream oil and gas assets. Its standalone rating is constrained by the regulatory uncertainties prevalent in Indonesia, Fitch added.

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