State-owned oil producer, PT Pertamina re-issued two series Global Medium Term Notes with total amount US$1.5 billion. Series A have tenure 10 years with coupon rate 3.65%, while Series B is 30 years with an interest rate of 4.7%.
Finance Director Pahala N. Mansury said, the funds will be used for capital expenditure (capex) this year (US$4.5 billion) and next year (US$9 billion), also for debt refinancing. He revealed, Pertamina has planned to rise upstream production and kick off the Balikpapan refinery in East Kalimantan, which is expected to be executed by the end of 2019.
While Moody’s Investors Service has assigned a Baa2 rating to the proposed senior unsecured notes to be issued by Pertamina. The rating outlook is stable. The notes will be issued under Pertamina’ US$10 billion GMTN program, which is rated (P) Baa2. Moody’s expects Pertamina’ retained cash flow-to-net-debt will weaken to 25% over the next two years from 51.2% in 2017, but remain within the parameters of its rating.
