Moody's drops Humpuss Intermoda

Moody's Investors Service said it has downgraded the national-scale senior unsecured bond rating of PT Humpuss Intermoda Transportasi TBK from A1.id to A3.id.

The agency said that the rating action follows Humpuss Intermoda's disclosure that is to expand into the dry bulk and chemical tanker segments and embark on an aggressive new vessel delivery schedule.

"While the fleet expansion and diversification into new segments will reduce Humpuss Intermoda's reliance on Pertamina, Indonesia's state-owned oil & gas company and rejuvenate the fleet, the pace and majority debt-funded nature of the expansion plan if fully implemented is aggressive and would weaken the company's financial profile," said Peter Choy, a Moody's vice president and senior credit officer.

"In addition, Humpuss Intermoda is expanding its fleet at a time when the global credit market is tightening which heightens the financial and execution risks of its business plan. The expansion into the dry bulk and chemical tanker segments and the increased proportion of its fleet under short-term charter will also raise the company's revenue volatility."

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