TEXT-Fitch give final rating Indika $ 500 Million bonds at 'B +'

Fri Jan 18, 2013 3:50am EST

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(The following statement was released by the rating agency)

Jan 18 - Fitch Ratings has set without senior secured bond rating Indo Energy Finance II BV some $ 500 million in the 'B +' with a recovery rating Rating at 'RR4'.

Final ratings are consistent with expectations defined ranking on January 8, 2013 following the receipt of final documentation in accordance with the information that has been previously accepted.

Obligation level 'B +' IDR level is equivalent Indika, which has a positive outlook, because of guarantee issued Indika will have the same position in the case of payment with all senior unsecured debt other Indika.

The result of the issuance of bonds is much higher when compared with short-term liquidity needs of Performance Management, including refinancing needs. However, Fitch found Indika will keep the remaining funds for refinancing needs in the future. Although, in the short term, this can weaken interest coverage and debt levels based on gross debt (gross debt leverage based), based on cash net debt levels will not be affected materially. Furthermore, Indika will benefit from lower interest costs in the long run with a 6375% annual coupon bonds that are lower than the average current in the 8.5% range and should help lower the cost of debt (debt servicing cost) firms in the long run.

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