Fitch Rates Indonesia’s ASF EMTN Programme ‘BBB-(EXP)’

(The following statement was released by the rating agency)
JAKARTA/TAIPEI/SINGAPORE, March 19 (Fitch) Fitch Ratings has
assigned
Indonesia-based PT Astra Sedaya Finance (ASF) a Long-Term Issuer
Default Rating
(IDR) of BBB- and Short-Term IDR of F3. The agency has
affirmed the
companys National Long-Term and Short-Term Ratings at AAA(idn)
and F1+(idn)
respectively . The outlook is Stable. At the same time, Fitch
Ratings has
assigned ASFs proposed USD1bn euro medium-term note (EMTN)
programme a senior
unsecured rating of BBB-(EXP), and its proposed notes of up to
USD250m under
the EMTN programme a rating of BBB-(EXP). The final rating on
the proposed
notes is contingent on the receipt of final documents conforming
to information
already received. A full rating breakdown is provided at the end
of this
commentary.
Fitch stresses there is no assurance that notes issued in the
future under the
programme will be assigned a rating, or that the rating assigned
to a specific
issue under the programme will have the same rating as the
programme. The
proceeds from the proposed issue will be used to support ASFs
business growth.
KEY RATING DRIVERS – IDRs
ASFs ratings reflect Fitchs expectation of a high probability
of support from
its majority shareholder, PT Astra International Tbk (AI). Fitch
considers ASF
as a strategically important subsidiary of AI, as ASF accounts
for a sizable
portion (around 30% in 2014) of the parents automobile credit
sales. The
support also reflects AIs significant 86% effective ownership
as well as ASFs
strong synergies and integration with the parent. AI is the
largest automobile
manufacturer and distributor with a dominant 51% share of the
market in
Indonesia by new car sales.
ASF provides direct financing services for buyers who purchase
AIs cars,
playing an important role in supporting AIs sales. AI is
Indonesias largest
private company by market capitalisation; it is a market leader
in the
automotive, financial services, agribusiness, heavy equipment
and information
technology sectors. It is 50.1% owned by Jardine cycle
Carriage Ltd, part of
Jardine Matheson Group.
Fitch expects ASF to continue delivering healthy profitability
in 2015 in spite
of a challenging economic environment, underpinned by its
manageable credit and
funding costs. Sound underwriting policy and risk management
should continue to
sustain its healthy asset quality. ASF has built up a high
reserve against
non-performing loans enabling it to absorb credit losses through
economic
cycles.
RATING SENSITIVITIES – IDRs, National Ratings
Any significant decline in AIs ownership and/or ASF
contribution to AI would
exert downward pressure on its IDRs and National ratings.
However, Fitch
believes this scenario is unlikely in the foreseeable future,
given ASFs
strategic importance to AIs core carautomotive business. ASFs
ratings are also
sensitive to Fitchs assessment of AIs credit profile; any
change of the AIs
assessment will most likely lead to a review of ASFs IDRs.
KEY RATING DRIVERS AND SENSITIVITIES – Debt Ratings
ASFs proposed euro medium-term notes are rated as the same
level as its IDR in
accordance with Fitch criteria. Any changes in ASFs IDR would
affect the issue
ratings.
The list of rating actions is as follows:
Long-Term Issuer Default Rating (IDR) assigned BBB-; Stable
Outlook
Short-Term Issuer Default Rating (IDR) assigned F3
National Long-Term Rating affirmed at AAA(idn); Stable Outlook
National Short-Term Rating affirmed at F1+(idn)
USD1bn Senior EMTN programme and senior tranches under the
programme assigned
BBB-(EXP)
National Senior Bond Programme II 2013 and senior tranches under
the programme
affirmed at AAA(idn) and F1+(idn)
Contacts:
Primary Analysts (International Ratings)
Ambreesh Srivastava
Senior Director
+65 67967218
Fitch Ratings Singapore Pte Ltd
6 Temasek Boulevard
#35-5 Suntec Tower Four
Singapore 038986
Julita Wikana (National Ratings)
Director
+62 21 2988 6808
PT Fitch Ratings Indonesia
DBS Bank Tower Level 24
Jl. Prof. Dr. Satrio Kav.3-5
Jakarta, Indonesia 12910
Secondary Analyst
Julita Wikana (International Ratings)
Director
+62 21 2988 6808
Committee Chairperson
Jonathan Lee
Senior Director
+886 2 8175 7601
Applicable criteria, Global Financial Institutions Rating
Criteria, dated 31
January 2014, Finance and Leasing Companies Ratings Criteria,
dated 12
December 2012, Rating FI Subsidiaries and Holding Companies,
dated 10 August
2012, and National Scale Ratings Criteria, dated 30 October
2013, are
available at www.fitchratings.com.
Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234,
Email:
leslie.tan@fitchratings.com.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
here
Finance and Leasing Companies Criteria
here
Rating FI Subsidiaries and Holding Companies
here
National Scale Ratings Criteria
here
Additional Disclosure
Solicitation Status
here
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND
DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS
LINK:
here. IN ADDITION,
RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE
ON THE AGENCYS
PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS,
CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCHS
CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE
FIREWALL, COMPLIANCE
AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE
FROM THE CODE OF
CONDUCT SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER
PERMISSIBLE
SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES.
DETAILS OF THIS
SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED
ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH
WEBSITE.


Comments are closed.