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Indika Energy Downgraded to B1 by Moody’s
February 13, 2026
Indika Energy and its 8.75% bond due 2029 were downgraded by a notch to B1 from Ba3 by Moody’s. The downgrade reflects weakening credit metrics driven mainly by rising capital spending at the Awak Mas gold project amid weakened thermal coal prices. Project costs for Awak Mas have risen by about $100–150mn to roughly $567mn, and the company is expected to fund most of the increase through additional borrowing. As a result, Indika’s adjusted debt is expected to climb to about $1.4bn in 2026 from $1.1bn in 2025. Awak Mas was around 50% complete at end-2025, with trial production expected by late 2026. Until the mine reaches its full capacity, Moody’s notes that its credit quality will rely heavily on subsidiary Kideco Jaya Agung, whose coal earnings remain constrained by soft prices. According to Moody’s, higher debt and modest earnings will push Indika’s leverage to about 7.0x in 2026, improving only after commercial production begins in 2027. Liquidity is considered adequate for the next 12–18 months, but higher spending tightens covenant headroom.
Its 8.75% 2029s traded stable at 99.3, yielding 8.99%.
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