PEFINDO: PT Jasa Marga (Persero) Tbk rated “idAA-” with outlook revised to positive

(May 11, 2022)--PEFINDO has affirmed its “idAA-” rating to PT Jasa Marga (Persero) Tbk (JSMR) and JSMR’s Shelf Registered Bond Year 2020. The outlook of the corporate rating is revised to “positive” from “stable” to anticipate better capital structure and cash flow protection measures with its plans to deleverage its debt using proceeds from its corporate actions in the near term. JSMR is in the process to divest its shares at some of its subsidiaries in the near term with potential proceeds to be used for debt deleveraging and toll road development. Its debt deleveraging effort combined with expected higher cash flow in line with the recovery of domestic economy may improve its capital structure and cash flow protection measures amid potential higher debt incurred in the medium term to repay the construction costs.

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 those of other Indonesian obligors. The Minus (-) sign indicates that the rating is relatively weak within the respective rating category. The suffix (sy) denotes the rating mandates compliance with Islamic principles.

The corporate rating reflects strong government support for completing toll road projects, JSMR’s dominant position in the toll road sector, diversified toll road portfolio with long concession period, and very strong financial flexibility. The rating is constrained by its more aggressive capital structure in the near to medium term and business risks related to the development of new toll roads.

The rating may be raised if the Company improves its capital structure by deleveraging its debt, if its new toll roads consistently attract traffic volume higher than projected, or if we view a stronger government support. The outlook may be revised to stable if the debt reduction has not significantly improved the capital structure, if the corporate actions are postponed due to market conditions, if the prolonged pandemic further reduced its traffic volume significantly, resulting in significantly lower toll revenue than projected, or if it incurs higher debt than projected, which may weaken its cash flow protection measures.

JSMR is the largest toll road operator in Indonesia. Its portfolio includes 13 old toll road concessions at parent company, 13 operated toll roads at subsidiaries, and 3 toll roads under construction. As of December 31, 2021, its shareholders were the Indonesian government (70.0%), BPJS Ketenagakerjaan (3.4%), BNYM RE BNYMLB RE Employee ProvidentFD (2.3%), PT Taspen (2.2%), and the public (22.1%). (ends)