PEFINDO: PT Angkasa Pura I (Persero)’s rating lowered to “idAA+”, outlook maintained negative
Tuesday, June 15 2021 - 12:52 AM WIB
(June 14, 2021)--PEFINDO has lowered the ratings of PT Angkasa Pura I (Persero) (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 have significant adverse impact to transportation industry including airports. We anticipate APAI’s cash inflows to be tight in fulfilling its operational and investment costs in 2021-2022, thus it will highly depend on external financing. In addition, the likelihood of extraordinary support from the government to APAI is considered to be lower considering that given the limited state budget particularly during this pandemic, the government will be more selective in providing extraordinary support to state-owned enterprises.
In our view, APAI as a profit-seeking entity will be encouraged by the government to fulfill its own financial obligations, given its strong financial flexibility in accessing external funds.
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)