Paiton's $180m debt on watch: S&P<\/p>\n
PT Paiton Energy, Indonesian unit of Edison Mission Energy, had
\n$180 million of debt placed on credit-watch with negative
\nimplications by Standard & Poor's, which said the company's
\nexpansion plan may hurt its creditworthiness.<\/p>\n
The bond, issued by Paiton Energy Funding BV, is currently
\nrated B-, six levels below investment grade and on a level under
\nIndonesia's B sovereign rating, S&P said in a statement. The
\noutlook on the rating is stable.<\/p>\n
Paiton last week said it plans to spend $580 million to
\nexpand the capacity of a coal-fired power plant in East Java
\nprovince. It plans to raise the capacity of its 1,230-megawatt
\nPaiton I plant by 800 megawatts, and sell the power to PT
\nPerusahaan Listrik Negara, the state utility company.<\/p>\n
\"If Paiton proceeds with the expansion, its credit profile
\ncould weaken, as the company might be exposed to construction
\nrisk and a higher debt burden depending on the contractual
\nstructure,\" S&P said in the statement. \"The proposed sharing of
\ncoal and ash-handling facilities of the two projects could affect
\nthe operational factors for the existing project.\"<\/p>\n
The credit-watch indicates Paiton's \"rating may be affirmed
\nor lowered,\" S&P said. -- Bloomberg<\/p>",
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