Moody's rates Perusahaan Listrik Negara bond B1

Moody's Investors Service said it assigned a B1 senior unsecured rating to Indonesia-based PT Perusahaan Listrik Negara's proposed dollar-denominated bond issuance. The agency also assigned a B1 corporate family rating to the company.

The outlook is stable. This is the first time that Moody's has assigned ratings to Perusahaan.

The rating reflects the application of Moody's Joint Default Analysis methodology on government-related issuers, given Perusahaan's 100% ownership by the Indonesian Ministry of State-Owned Enterprises. In accordance with this methodology, its rating reflects the combination of baseline credit assessment of 14, the B1 local-currency rating of the Indonesian government, the company's high dependence - which reflects its close operating and financial proximity to the government and the company's heavy reliance on government subsidies - and Perusahaan's high support, reflecting its importance to the economy and status as wholly government owned.

The rating also takes into account the track record of government support, which includes ongoing subsidies and government loans, the agency said. A downgrade in the sovereign rating also would trigger a downgrade for the company.

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