Moody's lowers Bumi Resources view to negative

Moody's Investors Service said it affirmed the B3 corporate family rating on Bumi Resources Tbk PT.

Moody's also said it affirmed the B3 rating on the series A issue and Caa1 rating on the series B senior secured notes due 2022 issued by Bumi's wholly owned subsidiary, Eterna Capital Pte. Ltd.

The issues are guaranteed by Bumi.

Moody's also said it revised the outlook to negative from stable.

The negative outlook reflects an expectation that Bumi's principal debt repayments will continue to trend lower than previous expectations, the agency said.

Moody's said it initially expected Bumi to repay $300 million to $500 million of principal under its series A notes and tranche A facilities by the end of 2019, following the completion of Bumi's debt restructuring in December 2017.

But, now the agency said it expects Bumi to repay only about $220 million of principal by the end of 2019, primarily due to lower-than-expected coal sales volume, working capital challenges and a price cap on domestic coal sales to electric utilities.

Negative ratings pressure will persist until such time as Bumi can materially improve its cash generation, Moody's added.

The negative outlook captures the heightened liquidity risk for Bumi, given large tax prepayments at it 51% owned subsidiary, Kaltim Prima Coal, the agency said.

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