PEFINDO affirms “idA+” ratings to PT Jakarta Lingkar Baratsatu and its bond
Tuesday, June 9 2020 - 06:16 AM WIB
(June 8, 2020)--PEFINDO has affirmed its “idA+” ratings to PT Jakarta Lingkar Baratsatu (JLBS) and its Bond I Year 2018. The outlook for the corporate rating is “stable”.
An obligor rated idA has a strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. However, the obligor is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated obligors. The Plus (+) sign indicates that the rating is relatively strong within the respective rating category.
The rating reflects JLBS’ strong traffic demand, solid profitability indicators, and strong operating cash flow supported by low capital spending. The rating is constrained by its exposure to traffic volume risk and risk of excessive dividend distribution.
The rating could be raised if the Company significantly exceeds revenue and/or EBITDA projections, while improving its financial leverage to a debt to EBITDA ratio of less than 2.0x on a sustained basis. The rating could be lowered if there is significant reduction in toll revenues due to traffic volume and/or if it incurs additional debt, making its financial leverage substantially higher than we anticipated. We could also lower the rating if the coronavirus disease (COVID-19) is prolonged followed by extended containment measures from the government resulting in a slower traffic recovery than we earlier anticipated. The rating could also be under pressure if it pays an excessive dividend payment to its shareholders, thereby limiting the scope of deleveraging.
JLBS was established in 1995 and started operating the 9.9-kilometer Jakarta Outer Ring Road (JORR)-W1 (Kebon Jeruk-Penjaringan) toll road in February 2010. The concession period will expire on February 2, 2042. Following the JORR integration in September 2018, JLBS’ revenue is derived from a revenue sharing scheme with other JORR’s operators from which it accounts for 15.32% of the overall JORR revenue. As of March 31, 2020, its shareholders were PT Bangun Tjipta Sarana (64.8%), PT Marga Utama Nusantara (35.0%), and PT Reka Daya Adicipta (0.2%). (ends)