Moody’s Investors Service has assigned a first-time Baa3 issuer rating to state-owned toll operator, PT Hutama Karya (HK). The rating outlook is stable and reflects its growing toll operations as the sole developer and operator of the large, multi-year, Trans-Sumatra project.

HK has been assigned as the sole developer and operator of the Trans-Sumatra Toll Roads, which will help transform its business profile from predominantly construction company to the country’s largest toll roads operator. Upon completion, the Trans-Sumatra toll road will be the longest toll road in Indonesia.

Reflecting the importance of the Trans-Sumatra project to the Indonesian government, the government also guarantees all debt pertaining to the Trans-Sumatra project, which accounted for 78% of the company’ outstanding debt as of December 2019.

The operator‘ order book position as of December 2019 was Rp58.9 trillion (US$3.75 billion). Based on revenues of Rp27.1 trillion for the 12 months to December 2019, this represents a healthy order book to revenue ratio of around 2.2x.