Fitch rates Indika notes BB-

Fitch Ratings said it assigned a rating of BB- to PT Indika Energy Tbk.'s (Indika, BB-/negative) proposed U.S. dollar notes.

The proposed notes will be issued by Indika's wholly owned subsidiary, Indika Energy Capital IV Pte. Ltd.

The proposed notes are rated at the same level as Indika's issuer default rating as they constitute direct, unsubordinated and unsecured obligations of the company, Fitch said. Indika plans to use the proceeds from the proposed notes repay some of its existing debt.

“Indika's ratings take into account its ability to meaningfully curtail operating costs amid weaker coal prices, the improving credit profile at its contract-mining operations, its capex flexibility and the potentially lower sensitivity of the group to weaker coal prices as a result,” Fitch said in a news release.

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