Moody's rates PLN notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to the proposed senior unsecured notes to be issued by PT Perusahaan Listrik Negara (PLN).

The outlook is stable.

The notes will be issued under the company's existing $5 billion medium-term note program.

The proceeds will be used to partially fund its capital expenditure requirements and for general corporate purposes relating to its 35,000 megawatt capacity addition program, Moody's said.

The ratings reflect the agency's methodology for government-related issuers, combining the company's standalone credit quality and an assessment of the credit support that the government of Indonesia is likely to provide in a distressed situation in light of its 100% ownership of the company, the agency explained.

The ratings also consider the company's position as Indonesia's only vertically integrated electric utility, including its dominant position in generation, transmission and distribution businesses and longstanding subsidies from the government ensure its financial viability and operational soundness, Moody's said.

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