Moody’s Investors Service has affirmed PT Indonesia Asahan Aluminium (Inalum or MIND ID)’ Baa2 issuer rating and the Baa2 ratings on the miner’ senior unsecured notes. At the same time, the agency has changed the ratings outlook to negative from stable.

“The negative outlook reflects the weaker than expected operating performance of some of Inalum’ subsidiaries, mainly on account of margin contraction amid softer commodity prices, and slower than expected capacity and downstream expansion,” says Nidhi Dhruv, a Moody’s senior analyst on Monday (April 13).

Its expects MIND ID’ weaker financial performance, coupled with the proposed debt-funded acquisition of a 20 – 25% stake in PT Vale Indonesia Tbk (INCO), will drive debt levels to around US$6.5 billion, and gross adjusted leverage to 8.0x-8.5x in 2020 from 6.2x in 2019.