Moody's rates Pelindo II notes Baa3

Moody's Investors Service said it assigned a Baa3 issuer rating to PT Pelabuhan Indonesia II (Persero) (Pelindo II) and a provisional Baa3 to the company's proposed senior bonds. The outlook is stable.

The proceeds will be used primarily to fund expansion plans and for general corporate purposes.

The agency said Pelindo II's Baa3 issuer rating reflects its baseline credit assessment of ba1, as a result of structural subordination, and a one-notch uplift based on Moody's expectation that the company will receive high levels of support from the Indonesian government (Baa3/stable) in times of need.

Pelindo II's baseline credit assessment is underpinned by its favorable industry dynamics, the continuing strong growth in demand for its services and its dominant position in Indonesia, with high barriers to entry, the agency said.

Offsetting these strengths is the company's significant expansionary capex plan, Moody’s said. The agency expects Pelindo II's debt level to increase as it pursues its expansionary plans.

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