Moody’s assigns Salak-Darajat bond Baa3

Moody’s Investors Service said it assigned (P)Baa3 ratings to the proposed senior secured dollar-denominated bond to be co-issued by Star Energy Geothermal Darajat II Ltd. and Star Energy Geothermal Salak, Ltd., which are both wholly-owned subsidiaries of Star Energy Geothermal BV (Salak-Darajat or Segsd).

The co-issuers will guarantee the bonds.

“The (P)Baa3 ratings of the proposed bond incorporate (1) Segsd’s predictable revenue profile, which is underpinned by its availability based revenue under long-term energy sales contracts (ESCs) with PLN, (2) its extensive operating track record, (3) its moderate financial profile, and (4) its exposure to resource renewal risk,” said Spencer Ng, a Moody’s vice president and senior analyst, in a press release.

The proposed bond will comprise two fully amortizing tranches, a nine-year tranche due 2029 and an 18-year tranche due 2038.

Segsd will use the proceeds to repay senior debt facilities and associated repayment expenses, funding of reserves and general corporate purpose relating to the geothermal operations.

The outlook is stable.

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