March 25 (The following statement was released by the rating agency)
Fitch Ratings has assigned a Final rating 'B +' with a recovery rating at 'RR4' to the senior
bonds with berjatuh guarantee tempo 7 years with a coupon of 6125% issued by Star Energy
Geothermal (Wayang Windu) Limited (SEG).
Factors Fueling Rating
Final rank is equal to the expected ratings given dateMarch 10, 2013 after an assessment of the
final document that is materialequal to the draft document. Bonds rated the same as the Issuer
DefaultRating (IDR) at the company's 'B +', because equality with debtsOther companies that are
direct, unconditional and seniorguarantee.
The results of the bond issue will mostly be used to performrefinancing of the existing senior
bond with a bail of USD ISD337.5 million, of which USD 12.5 million, USD 25 million and USD 300
million will be duein 2013, 2014 and 2015, respectively. The process of refinancing will provide
optionsfor SEG to immediately make a payment of USD 85 million against debtsubordinated
shareholders, amounting to USD 102 million, and then performannual payments of $ 1 million in
subsequent years. Fitchestimated payments to the loan holder of separation will be taken from
the cash athand totaling USD 139 million at the end of December 2012 so that the level of
debtSEG will not change materially.
Although the refinancing will increase the level of liquidity in the SEG medium term, net debt
levels will increase due topayment of subordinated shareholder loan amounting to USD 85 million.
thisbecause Fitch has not put shareholder loanas considering the nature of subordinated debt and
interest free. However, Fitch does notestimates that funds from operations (FFO) net leverage
will exceedguidance of 5.0x on an ongoing basis. This is due to Fitch's expectationthat SEG will
generate positive cash flow from operations, issuecapital expenditures are limited and will not
pay big dividendsthe medium term. Fitch million in consideration of the payment schedulenewly
issued bonds amounting to USD 30 million - USD 40 million per yearbegan in 2017.
SEG ratings reflect the risks inherent in geological wherecompanies operating in the area with
active seismic and certainty thathigh income. The ratings are limited by geological risksmainly
due to the reliance on a single area of operation and the potentialthe amount of capital
expenditures relative to the balance sheet. In contrast,the company has demonstrated a reliable
operational performance, whichbased on energy sales contract 'take or pay' long term PT
Perusahaan Listik Negara (BBB-/Stable).
Negative: future developments that could, individually or collectively,triggering the decline
include:- FFO adjusted net leverage exceeding 5.0x (2.4x in 9M12) and operational fundsto pay
interest (FFO interest coverage) fell below 2.0x (1.9x in 9M12)on an ongoing basis.
Positive: Positive action will be limited to the ratings in the next 12-18 monthsfront. However,
Fitch may consider a positive ranking measureswhen there is certainty of future capital
expenditure and willcapital structure of the company and if the company can reduce the level
ofleverage below 3.5x on an ongoing basis.