RELEASE:S&P:Expansion likely to pressure Paiton Energy rating

SINGAPORE (Standard & Poor's) Jan. 21, 2008--Standard & Poor's Ratings Services said today that PT Paiton Energy's (Paiton) proposed 800 MW capacity expansion would likely place downward pressure on the 'B' rating on the US$180 million senior secured bond issued by Paiton Energy Funding B.V., which is guaranteed by Paiton.

This rating factors in the possibility of a significant increase in borrowings, accompanied by a higher level of project completion and construction risks. Standard & Poor's understands from Paiton that, while some progress has been made, discussions are yet to translate into a committed investment plan.

Further clarity on the discussion progress is expected in the next 30 to 60 days, after which Standard & Poor's would evaluate the impact of the proposed expansion on the rating.(end of release)