Fitch rates Pelabuhan Indonesia bonds BBB-

Fitch Ratings said it assigned PT Pelabuhan Indonesia III (Persero) (Pelindo III) a long-term foreign currency issuer default rating and a senior unsecured rating of BBB-.

The outlook is stable.

The agency also assigned a BBB-(EXP) rating to Pelindo III's proposed senior unsecured dollar-denominated bonds.

Fitch said the BBB- ratings reflect Pelindo III's standalone credit profile, which benefits from its entrenched market position with limited competition in the regions it operates in, direct ownership of most of its assets, robust growth prospects and its stable profitability and operating cash generation. The standalone ratings remain constrained at BBB- owing to Pelindo III's large capital expenditure program to expand its port capacity, leading to sizeable negative free cash flows over the medium-term.

The ratings would benefit from a one-notch uplift in the event its standalone credit profile falls below that of its 100% shareholder, the Republic of Indonesia (BBB-/stable), owing to its strategic importance to the state.

The proposed bonds are rated at the same level as Pelindo III's issuer default rating of BBB- because they will constitute direct, unconditional and senior unsecured obligations of the company.

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