Moody’s gives Freeport Indonesia Baa3

Moody’s Investors Service said it gave Baa3 ratings to PT Freeport Indonesia and its planned dollar-denominated senior unsecured notes.

"The Baa3 rating reflects PTFI's established track record of operations at the Grasberg mineral district, reserve life through 2041, very low-cost operations given the significant gold content in its copper concentrate, and strong EBITDA margins of over 60%," said Nidhi Dhruv, a Moody's vice president and senior analyst, in a press release.

"At the same time, PTFI's Baa3 ratings incorporate the company's exposure to downside risks, given its limited operational, commodity and geographical diversity. Its copper sales contribute about 70% of revenues and gold sales account for 28%, with the balance attributed to silver. Notwithstanding the product concentration, PTFI will likely benefit from the supportive prices for copper and gold over 2022-2023," added Dhruv, who is also Moody's lead analyst for PTFI.

The issuer will primarily use the bonds to finance its smelter projects, for refinancing and for general corporate purposes.

The outlook is stable.

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