S&P lowers Persero stand-alone rating

Standard & Poor’s said it affirmed the BB+ long-term corporate credit rating on Perusahaan Gas Negara (Persero) Tbk.

The agency also said it affirmed the BB+ long-term issue rating on the company’s senior unsecured notes and the company’s axBBB+ long-term Asean regional scale rating.

The agency also said it lowered an assessment of the company’s stand-alone credit profile to BBB- because the company’s planned increase in capital spending and the subdued operating performance of its gas distribution business will substantially weaken its cash flow over the next two years.

The outlook is positive.

The company’s sizable spending in 2015 and large investment plan in 2016 through 2018 marks a shift away from the company’s strategy of making moderate investments and having a conservatively managed balance sheet, S&P said.

The company’s ratings are constrained by the BB+ sovereign credit rating on Indonesia, the agency said.

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