PEFINDO: PPLN rated “idAAA” with stable outlook

(June 9, 2021)--PEFINDO has affirmed its “idAAA” ratings for Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara (PPLN) and its bonds.

PEFINDO has also affirmed its “idAAA(sy)” ratings for PPLN’s Sukuk Ijarah. The outlook for the corporate rating is “stable”.

An obligor rated idAAA has the highest rating assigned by PEFINDO. The obligor’s capacity to meet its long-term financial commitment, relative to that of other Indonesian obligors, is superior.

The suffix (sy) indicates the rating mandates Islamic principles compliant.

The corporate rating reflects PPLN’s strong and proven support from the Indonesian government, its strong financial flexibility, its superior market position, and potential room for domestic electricity demand. The rating is constrained by its capital structure and cash

flow protection measures, which will remain aggressive to support its significant capital expenditure (capex) plan.

We are of the view that the prolonged pandemic will remain challenging for PPLN’s revenue growth and capex spending in the near to medium term. However, we do not expect the government to reduce its support for PPLN. The rating could be lowered if PEFINDO views a material reduction in government support.

PPLN is a wholly owned state company engaged in the generation, transmission, and distribution of electricity throughout the country.

It is the only integrated electricity producer in Indonesia, with an installed capacity of 45,616 megawatts (MW) (including rental) at the end of 2020. (ends)