S&P affirms PGN

Standard & Poor's said it affirmed PT Perusahaan Gas Negara Tbk.'s (Persero) B+ corporate credit rating and PGN Euro Finance 2003 Ltd.'s B+ senior unsecured notes.

The outlook is stable.

The rating on PGN reflects gas supply constraints, a mismatch of length of gas sales with sale contracts, an aggressive capital expenditure program, high concentration of industrial customers, material country risks and regulatory uncertainties, the agency said.

These factors are somewhat offset by the company's dominant market position in the transmission business, a natural monopoly in the distribution network, insulation from price risk and minimal volume risk for the transmission business.

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