Fitch assigns Indika's USD500m notes final 'B+' rating

(Singapore/Hong Kong-18 January 2013) -- Fitch Ratings has assigned Indo Energy Finance II B.V.'s USD500m senior unsecured 10 year 6.375% notes a final rating of 'B+' with a Recovery Rating of 'RR4'.

The final rating is in line with the expected rating assigned on 8 January 2013 and follows a review of final documentation materially conforming to the draft documentation previously reviewed.

The notes are rated at the same level as PT Indika Energy Tbk's (Indika) Issuer Default Rating of 'B+', which has a Positive Outlook, as the guarantee issued by Indika will rank equally in right of payment with all unsecured, unsubordinated indebtedness of the company.

The USD500m proceeds from the notes issue are materially higher than Indika's immediate liquidity requirements, including its refinancing needs. Fitch, however, believes that Indika will retain the remainder mostly for future refinancing needs. While this may weaken Indika's interest coverage and gross debt based leverage over the short term, its leverage net of cash will not be materially affected. Further, the bonds' 6.375% annual coupon is lower than Indika's current average borrowings costs of around 8.5%, and should help lower debt servicing cost for the company over the long-term. (ends)