RPT-Fitch affirms rating of BFI Finance at 'A + (idn)'; stable outlook
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Dec 6 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings set backNational Long-Term rating of PT BFI Finance Indonesia Tbk (BFIN) at 'A + (idn) 'with a stable outlook, and provide a Long-Term National Rating'A + (idn) 'over the continuous bond program to two the number of maximumIDR2.5 trillion. Funds from the bond program will be used to supportthe growth of the company's business.
Bonds under this program must be issued within two yearssince the program was launched in January 2014. Fitch has also providedNational Short-term rating at 'F1 (idn)' above BFIN, bond programs, andstages under the bond program.
National ranking in the category 'A' indicates the expectation would risk failurelow pay relative to other issuers or securities inIndonesia. However, a change in circumstances or economic conditions may beaffect the capacity to pay in a timely manner than commitmentFinancial shown by the higher rating categories.
National Rating 'F1' indicates the capacity to pay financial commitmentsThe most powerful in a timely manner relative to other issuers or debt securitiesin Indonesia. National rating scale of Fitch, the ratings giventhe lowest default risk relative to the rest of Indonesia.If specific liquidity profile is strong, a "+" is added to theratings given.
Fitch also assigned National Long-term rating 'A + (idn)' andShort-Term National Rating 'F1 (idn)' for senior unsecured bondswhich will be published as the first stage of an ongoing bond programto the two above. For this first phase, the amount of the issuance is up toIDR500 billion with a maturity of up to three years.
Bonds rated on the same level with the National RatingLong Term and Short Term BFIN. This is because the bondsthese are unsecured obligations, is direct, not asubordinated and senior debt of the company and the equivalent of all the obligationsunsecured and subordinated debt not others.
The ratings reflect Fitch's expectation would BFIN BFIN the capitalstrong with low debt ratio compared to its peers.The ratings also consider the relatively moderate asset quality,were slightly lower in Q313.
Returns on assets (ROA) decreased to 7.0% in 3Q13 from 8.3% in 2012,while the ratio of profit to capital (ROE) also decreased to 16.9% of18.8% in the same period. Fitch believes profitability will continuelower in 2014 primarily due to higher credit costs causedweakening economic outlook and increased operating expenses associated withincrease the number of branches and higher funding costs. profileBFIN capital remained healthy with debt ratio slightly increased to1.4x at the end of 3Q13 compared to 1.2x at the end of 2012.
The ratio of non-performing loans (non-performing loans) BFIN rose to 1.5% in 3Q13compared with 1.1% in 2012 due to the deteriorating economic environmentas a result of rising inflation and measures Indonesian banks to raiseinterest rates to stabilize the local currency. Fitch expects the declinefurther in asset quality in 2014. However, the increase in the cost of credit willmoderate and restrained considering a diversified portfolio of car financingand the prospects for recovery (recovery) of bad loans caused strongthe company's focus on four-wheeled vehicles with a resale value (resalevalue) is high.
Factors Stage Actuator
The existence of a significant weakening in BFIN advantages that have beenmentioned above will put pressure on the ratings. ratingcompanies may also be depressed if asset quality deterioratessignificant because the company continues to pursue high credit growth.The possibility of a small increase in ranking is due to the dependence onfunding of institutions lead to higher liquidity risk.Any change in the national rankings and ratings Term Long TermShort BFIN will affect bond ratings issued.
Here are the bonds that have been issued:
National Long-term rating affirmed at 'A + (idn)'
National Short-term rating is given at 'A + (idn)'
I Sustainable Bonds 2012 affirmed at 'A + (idn)'
Sustainable Bonds I Phase I in 2013 affirmed at 'A + (idn)'
Sustainable Bond I Phase II in 2013 affirmed at 'A + (idn)'
III bonds affirmed at 'A + (idn)'
Medium Term Notes 2012 affirmed at 'A + (idn)'
Sustainable Bonds II in 2013 granted at 'A + (idn)'
Sustainable Bond II Phase I in 2013 given at 'F1 (idn)'
Sustainable Bond II Phase I in 2013 given at 'A + (idn)'
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