PEFINDO has lowered the rating for PT Waskita Karya

(October 12, 2023)--PEFINDO has lowered the rating for PT Waskita Karya (Persero) Tbk (WSKT)’s shelf- registered (SR) Bond III Phase III to idD from idCCC. Our rating action is based on the Company’s failure to pay the principal and coupon of the bond due on September 29, 2023, and our expectation that it will not be able to make coupon payments within the 14 working days grace period as stipulated in the bond’s trustee agreement after the said bondholders have rejected WSKT’s request to extend its maturing principal and coupon payments.

PEFINDO has maintained the rating for WSKT at idSD, the rating for its SR Bond III Phase II and SR Bond IV at idD, and the ratings for its SR Bonds III Phase IV at idCCC. WSKT has obtained approval from bondholders to defer coupon payments on its SR Bonds III Phase IV until October 15, 2023.

We have also affirmed the ratings for its bond III and bond IV at idAAA(gg) as well as its Sukuk Mudharabah I at idAAA(sy)(gg), which reflects the full, unconditional, and irrevocable guarantee from the government of Indonesia. For the guaranteed debt securities, the creditors have allowed WSKT to continue serving its financial obligations and the Company has allocated sufficient funds for the next coupon payment of the guaranteed Sukuk and bonds.

WSKT is one of the state-owned construction companies engaging mainly in providing construction works with a contribution of more than 88% of its revenue in 2022. Its other businesses include precast concrete, steel fabrication, toll roads, property, and energy. The Indonesian government held a 75.35% stake in WSKT as of June 30, 2023, with the remainder being publicly owned. (ends)