PEFINDO lowers ratings of Waskita, bonds

(February 16, 2023)--PEFINDO has lowered the ratings for PT Waskita Karya (Persero) Tbk (WSKT) and its shelf-registered (SR) bonds III and shelf-registered bonds IV to idCCC. The outlook for the corporate rating remains at CreditWatch with Negative Implication. The rating action follows the Company’s inability to serve the coupon payment on its SR Bond III Phase IV series B due on February 16, 2023. WSKT has arranged for bondholders’ meeting on February 16-17, 2023, for its SR Bonds III and SR Bonds IV, with one of the agenda is to request for schedule amendment for coupon and principal payment. At the same time, we 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.

The rating could be lowered if WSKT does not obtain the bondholders’ approval to make changes to the payment schedule for the principal and bond coupons. In addition to the PUB Bond III coupons that have already matured, the Company also faces an obligation to repay SR Bond III Phase II Series B principal amounting to IDR2.3 trillion which will mature on February 23, 2023.

WSKT is one of the state-owned construction companies in the country engaging mainly in providing construction works with a contribution of more than 87% of its revenue in the first nine months of 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 September 30, 2022, with the remainder being publicly owned.