S&P keeps ratings on RI project bonds<\/p>\n
NEW YORK (Dow Jones): Standard & Poor's single-B ratings on
\nthe following Indonesian independent power producer (IPP) project
\nbonds and bank loan ratings remain on CreditWatch with negative
\nimplications, where they were placed on Dec. 1, 1997:<\/p>\n
-- Paiton Energy Funding B.V.'s US$180 million senior secured
\nbonds due 2014 (guaranteed by P.T. Paiton Energy Co.),<\/p>\n
-- CE Indonesia Funding Corp.'s $400 million bank loan
\nfacility (funding to Dieng and Patuha geothermal projects), --
\nDSPL Finance Co. B.V.'s $150 million 9.12 percent senior secured
\nnotes due 2010 (guaranteed by Dayabumi Salak Pratama Ltd.), and<\/p>\n
-- MNL Indonesia Funding Corp.'s $250 million bank loan
\nfacility (for Wayang Windu Geothermal Project).<\/p>\n
Recent attempts by the state-owned utility, PT Perusahaan
\nListrik Negara (Persero) (PLN), to make partial payments in
\nrupiah (IDR) instead of contractually required U.S. dollars may
\npotentially result in rating downgrades to at least the triple-C
\nlevel from the single-B ratings.<\/p>\n
As the economic and financial situation in Indonesia continues
\nto deteriorate, operating independent power projects are
\nincreasingly at risk of defaulting on their fixed obligations.<\/p>\n
The projects' offtaker, PLN, has attempted to pay for December
\npower deliveries in rupiah at a Rp 2,450 to the dollar exchange
\nrate instead of the contractual U.S. dollar amount.<\/p>\n
Such a situation, if sustained, which amounts to approximately
\n25 percent of the amount due at current exchange rates of about
\nRp 10,000 to the dollar, likely would cause the power project
\ncompanies to default on their debt.<\/p>\n
If the government, vis a vis the Ministries of Finance and
\nMines and Energy, does not remedy the situation by providing PLN
\nwith sufficient funds to cover the shortfall in purchased power
\npayments, the project bond and loan ratings could drop to as low
\nas triple-C.<\/p>\n
Both Ministries and PLN have stated that it is their intention
\nto comply with the terms of the electricity sales contracts;
\nhowever, the monetary crises may prevent PLN from making full
\npayment until the situation improves. Projects that are under
\nconstruction and not scheduled for completion until the end of
\n1998 or later are somewhat less at risk of near-term default than
\nthose already in operation, but still face many of the same
\nrisks, S&P said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sp-keeps-ratings-on-ri-project-bonds-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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