S&P upgrades Perusahaan Gas

Standard & Poor's said it raised its corporate credit ratings on PT Perusahaan Gas Negara (Persero) Tbk. to BB+ from B+ and the senior unsecured debt issued by PGN Euro Finance 2003 Ltd. to BB+ from B+.

The outlook is stable.

The agency said the upgrade factors in expectation of an improving financial profile in the short to medium term, with revenue increasing as a result of the completion of the two new major transmission lines from South Sumatra into West Java and the ongoing expansion of its distribution network.

The ratings reflect the company's dominant market position and minimal price and volume risk for its transmission business, S&P said, balanced against its aggressive capital expenditure, high concentration on industrial customers, gas supply constraints and mismatch of gas sales contract length and country and regulatory risks.

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