PEFINDO: PT Jasamarga Pandaan Tol rated “idA+” with outlook revised to positive

(May 19, 2022)-- PEFINDO has affirmed its rating for PT Jasamarga Pandaan Tol (JPTR) at “idA+”, and its Sukuk Ijarah Year 2019 at “idA+(sy)”. The outlook for the corporate rating is revised to “positive” from “stable”. The rating action reflects a similar revision on the credit rating outlook of its parent, PT Jasa Marga (Persero) Tbk. (JSMR, “idAA-/positive”) following on the expectation of JSMR improving financial ratios through debt deleveraging using the proceeds from corporate actions in the near term. JPTR is considered a core subsidiary of JSMR and therefore, any changes in the parent’s corporate rating and/or outlook will be mirrored to JPTR.

An obligor rated idA has a strong capacity to meet its long-term financial commitments relative to those of other Indonesian obligors.

However, the obligor is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated 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 very strong support from PT Jasa Marga (Persero) Tbk (Jasa Marga) (JSMR, idAA-/Positive). The rating also reflects the good economy of JPTR’s service area, and stable revenue stream with relatively strong EBITDA margin. However, the rating is constrained by its high financial leverage and exposure to traffic volume volatility on a single toll road asset.

We may raise JPTR’s rating if Jasa Marga’s rating is upgraded. The oulook may be revised to stable if Jasa Marga’s outlook revised to stable. The rating may be under pressure if we view lower degree of support from Jasa Marga, indicated by material divestment, substantially lower span of control from Jasa Marga. JPTR’s significantly weakening standalone credit profile resulting from low traffic volume, lower-than-expected toll tariff adjustment, and/or higher cost than estimated may also change our view on JPTR’s degree of importance to Jasa Marga, which eventually may result in JPTR’s lower rating.

Established on September 25, 1996, JPTR operates the Gempol-Pandaan toll road, comprising a 12.05-kilometer (km) Tranche I operating since June 12, 2015, and a 1.56 km Tranche II since May 13, 2019, when the Pandaan-Malang toll road began operating. Its concession agreement with the Indonesian Toll Road Authority runs until October 3, 2049. It is a subsidiary of Jasa Marga, the leading toll road operator in Indonesia with 40 years of experience. In April 2019, JPTR exercised a rights issue through the KIKDINFRA issuance, resulting in the entry of a new shareholder and a reduced stake for Jasa Marga, which has the option to gradually buy back shares over the next five years. At the end of December 2021, its shareholders were Jasa Marga (40%), PT Trans Optima Luhur (53.8%), and PT Jalan Tol

Kabupaten Pasuruan (6.2%). (ends)