Moody's rates Pelindo III bonds Baa3

Moody's Investors Service said it assigned Baa3 ratings to senior unsecured bonds of up to $1 billion to be issued by Pelabuhan Indonesia III (Persero) (Pelindo III).

The outlook is stable.

The proceeds will be used to refinance existing bank facilities, fund capital spending and for general corporate purposes, Moody's said.

Pelindo III's Baa3 issuer rating reflects the application of Moody's rating methodology for government-related issuers, the agency said.

The company's ba1 baseline credit assessment is underpinned by its dominant position in central and eastern Indonesia, Moody's said, and the favorable macroeconomic conditions in the country.

The key driver of Pelindo III's financial metrics over the next few years is the company's actual capital spending rate, which will in turn determine the size and timing of additional debt requirements, the agency said.

Pelindo III has a track record of underspending its budgeted allowance for capital expenditure, which can result in stronger financial metrics in the near term, Moody's said.

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