PEFINDO affirmed its “idAAA(sf)” rating for PT Tamaris Hidro

(December 13, 2023)--PEFINDO affirmed its “idAAA(sf)” rating for PT Tamaris Hidro (TYRO)’s Bond I Year 2022. The instrument rating reflects a very strong structure with credit enhancement from PT Sarana Multi Infrastruktur (Persero) (SMII, idAAA/stable). The rating has incorporated TYRO’s moderate financial profile.

The instrument rating may be lowered if the credit enhancer’s corporate rating is downgraded or if TYRO utilizes the non-revolving credit enhancement facility more than expected, such that the remaining facility is deemed incommensurate with the level of protection for the assigned rating.

PEFINDO views that the risk of delay of payment as well as default on the bond principal and/or coupon is mitigated by subordinated credit facility of a maximum of IDR750.0 billion from SMII as the credit enhancement, which also followed by cash flow waterfall mechanism and bond sinking fund for the coupon and principal. Under our stress test, we project TYRO to incur additional debt in 2028 if significant deterioration takes place. Under such circumstances, we anticipate TYRO will utilize part of SMII’s subordinated facility during that period to mitigate the refinancing risk under the proposed transaction structures. We also view this transaction as based on a robust cash flow protection profile, bolstered by the remaining ample subordinated credit facility from SMII if it is utilized. The cash waterfall mechanism also ensures that the collected cash inflows will prioritize the payments for bond coupons and debt services of bank loans. TYRO’s commitment to providing a one-time bond coupon sinking fund and fully reserving its bond principal payments three months before the due date will augment the cushion for debt services payment.

TYRO is an investment holding company for hydro and mini hydro power plant projects (HMHPP). It is actively seeking potential locations for HMHPP, developing greenfield and brownfield projects, and acquiring power plants. Currently, its power generation portfolio includes fourteen operating companies with a total capacity of 126.8 megawatts (MW). In terms of installed capacity based on type, mini-hydro power plants account for 65.0%, while the remainder of hydro-power plants (35.0%). It also has an affiliated company providing construction for its projects and operation and maintenance (O&M) services. As of June 30, 2023, its shareholders consisted of PT Tatajabar Sejahtera (85%, part of Salim Group), and PT Tamaris Hijau Lestari (15%).

As a credit enhancer, SMII is established to serve as a catalyst in the acceleration of infrastructure development in Indonesia by providing an alternative source of funds for project financing and promoting public-private partnerships (PPP). It is wholly owned by the government. (ends)