Moody's announces completion of a periodic review of ratings of Bayan Resources Tbk (P.T.)
Tuesday, April 30 2019 - 06:53 AM WIB
(Singapore, April 30, 2019) -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings of Bayan Resources Tbk (P.T.) and other ratings that are associated with the same analytical unit. The review was conducted through a portfolio review in which Moody's reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. The review did not involve a rating committee. Since 1 January 2019, Moody's practice has been to issue a press release following each periodic review to announce its completion.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.
Key rating considerations are summarized below.
Bayan Resources Tbk (P.T.)'s (Bayan) Ba3 corporate family rating reflects (1) its growing thermal coal production following the ramp-up at its Tabang mines; (2) the 30-year reserve life of its mines; (3) its strong profitability, supported by its low cost structure; and (4) adherence to prudent financial policies, as seen from its recent track record of debt reduction.
At the same time, Bayan's Ba3 rating is constrained by a lack of diversification as a result of its single-commodity exposure to thermal coal and its geographic concentration, because its mines are located in Kalimantan, Indonesia. The rating also takes into account the company's relatively short track record at its Tabang mines, having only started to materially increase production in 2015. (ends)