Fitch changes Perusahaan Gas to stable

Fitch Ratings said it affirmed PT Perusahaan Gas Negara Tbk.'s long-term foreign- and local-currency issuer default ratings at BBB-.

The outlook was revised to stable from positive following the publication of the agency’s criteria on government-related entities.

Fitch also affirmed the company’s senior unsecured rating and the rating on its $1.35 billion 5 1/8% bonds due 2024 at BBB-.

The agency now rates Perusahaan Gas one notch below its parent, the state of Indonesia (BBB/ stable), in line with its government-related entities (GRE) criteria, based on the linkages between Perusahaan Gas and the state and considering the socio-political and financial implications of default.

Fitch said it continues to assess Perusahaan Gas’ standalone credit profile at BBB-, driven by its business profile with weakened pricing power. However, the agency assesses its financial profile to be stronger than the standalone profile of BBB-.

Fitch has not at present factored in the proposed acquisition/merger of PT Pertamina Gas with Perusahaan Gas as a part of the transfer of Perusahaan Gas’ shareholding to Pertamina in the absence of information on the nature of merger/acquisition and capital structure post-merger, the agency said in a news release.

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