Approximately US$1 Billion of Debt Securities Affected
Hong Kong, May 18, 2011 -- Moody's Investors Service has assigned a definitive Ba1 senior unsecured
bond rating to the US$1 billion 5.25% notes due 2021
issued by PT Pertamina (Persero).
RATINGS RATIONALE
Moody's definitive rating on this debt obligation confirms the provisional
rating assigned on 9th May 2011. Moody's rating rationale was set
out in a press release published on the same day, and explored more
fully in a Credit Opinion published on 10th May 2011.
The bond proceeds will be used for financing capital expenditures and
for general corporate purposes.
As a Government-Related Issuer (GRI), Pertamina's Ba1
rating reflects its baseline credit assessment (BCA) of '11',
which maps to Moody's global scale of Ba1, and the strong
support and dependence from the Indonesian government (Ba1/stable) under
the Joint Default Analysis approach (JDA).
Pertamina's BCA reflects the company's strategically important
position as Indonesia's national integrated oil & gas company,
contributing significant upstream production and accounting for all the
current refining capacity in the country. It operates at a low-cost
and moderate leverage, though the latter is expected to rise with
its planned investments.
The company is exposed to moderate regulatory risks associated with a
transitioning framework, and execution risks associated with increasing
investments in upstream exploration and production, refineries,
and potentially acquisitions.
Moody's views the credit profiles of Pertamina and the Indonesian
government as closely linked to each other, given Pertamina's
strategic role in oil & gas exploration and product distribution for
the country, as well as the government's tight supervision
over Pertamina's strategies and budgets.
The principal methodology used in rating PT Pertamina (Persero) was the
Global Integrated Oil & Gas Industry Methodology, published
November 2009.
PT Pertamina (Persero) is a 100% Indonesian government-owned,
fully-integrated oil and gas corporation, with operations
in upstream oil, gas and geothermal exploration and production,
downstream oil refining, marketing, distribution, transportation
and trading of petroleum products.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information, and confidential
and proprietary Moody's Investors Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of assigning
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
Hong Kong
Renee Lam
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service Hong Kong Ltd.
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Singapore
Philipp L. Lotter
Senior Vice President
Corporate Finance Group
Moody's Investors Service Singapore Pte. Ltd.
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Moody's assigns definitive Ba1 rating to Pertamina's bond