The Jakarta Post
Moody's Investors Service has assigned a Baa2 issuer rating to state-owned mining holding company PT Indonesia Asahan Alumunium (Inalum) and a Baa2 rating to the company's proposed senior unsecured notes. The outlook on the ratings is stable.
Proceeds from the notes issuance will be used to fund a portion of Inalum's proposed $3.85 billion payment to increase its ownership share of PT Freeport Indonesia (PTFI), which controls the rights to mine the Grasberg minerals district, to 51.23 percent.
“Inalum will benefit from the scale of PTFI's operations, who mines the world's second-largest copper mine and largest gold mine at Grasberg. However, credit risk will rise due to a considerable increase in financial leverage and complex capital expansion projects at PTFI," said Brian Grieser, Moody's vice president and senior credit officer and lead analyst for Inalum.
Inalum is a government-appointed holding company for state-owned mining entities. It owns and manages the government's 65 percent stake in PT Aneka Tambang (Antam), PT Bukit Asam and PT Timah, as well as its 9.36 percent interest in PTFI.
Moody’s said Inalum's Baa2 issuer rating reflected the application of Moody's rating methodology for government-related issuers that combines its ba2 baseline credit assessment (BCA) and a three-notch uplift based on Moody's expectation of a high likelihood of extraordinary support for the company from the government of Indonesia (Baa2 stable) in times of need.
This is the first time that Moody's has assigned ratings to Inalum. (bbn)