PEFINDO: Angkasa Pura I proposed Shelf-Registered Bond I Year 2021 and Sukuk Ijarah I Year 2021 rated “idAA+” and “idAA+(sy)”

(September 2, 2021)--PEFINDO has assigned its “idAA+” rating for PT Angkasa Pura I (APAI)’s proposed Shelf-Registered Bond I Year 2021 of a maximum of IDR2,350.0 billion, with a maximum of IDR1,731.0 billion for its first phase. PEFINDO has also assigned its “idAA+(sy)” rating for APAI’s proposed Shelf-Registered Sukuk Ijarah I Year 2021 of a maximum of IDR1.5 trillion, with a maximum of IDR1.0 trillion for its first phase. The proceeds will be used to refinance its matured Bond and Sukuk Ijarah in November 2021 and working capital. Earlier in June 2021 PEFINDO has lowered the ratings of APAI and its Bond I Year 2016 to “idAA+” from “idAAA” and the rating of APAI’s Sukuk Ijarah I Year 2016 to “idAA+(sy)” from “idAAA(sy)”. The outlook for the corporate rating was maintained at “negative”. The rating actions reflect the ongoing pressure on APAI’s credit profile in the medium term affected by the prolonged pandemic which has a significant adverse impact on the transportation industry including airports. We anticipate APAI’s cash inflows to be tight in fulfilling its operational and investment costs in 2021-2022, thereby being highly dependent on external financing. In addition, the likelihood of extraordinary support from the government to APAI may be lower given the constraint of state budget particularly during this pandemic, prompting the government to be more selective in providing extraordinary support to state-owned enterprises. In our view, as a profitseeking entity, APAI will be encouraged to access external funds to fulfill its own financial obligations, given its strong financial flexibility.

An obligor rated idAA differs from the highest-rated obligors only to a small degree, and has a very strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. The plus (+) sign indicates that the rating is relatively strong within its category. The suffix (sy) means the rating mandates compliance with Islamic principles.

The corporate rating reflects strong government support for APAI due to the strategic importance of airports, a strong competitive advantage from its economy of service area, and a well-diversified revenue. The rating is constrained by its weak financial profile due to pandemic.

The rating may be lowered if the extremely difficult operating environment caused by pandemic is more severe or prolonged than we expect, or if APAI becomes more aggressive in financing its capital expenditures. Increasing refinancing risk or reduced financial flexibility in obtaining financing sources could also trigger a rating downgrade. The rating could also be lowered if we view the government’s commitment to provide extraordinary support, particularly during pandemic, has weakened, including a material divestment of ownership. The outlook could be revised to stable if the APAI’s revenue starts to recover and records positive growth month-over-month on a sustained basis.

A state-owned enterprise (SOE) engaged in airport and airport-related services, APAI operates 15 airports in the central and easter parts of Indonesia. It is fully owned by Indonesian government. (ends)