RPT-FITCH affirms Indonesia's SMF at 'AA(IDN)'; outlook stable

Mon Mar 10, 2014 6:39am EDT

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March 10 (Reuters) - (The following statement was released by the rating agency)

The announcement was made to replace the previous version of the published date of 10 March 2014 in which there is an error in writing the name and the title company article.

Fitch Ratings has affirmed the National Long-Term rating of PT Sarana Multigriya Financial (Persero) (SMF) at 'AA (idn)' and National Long-rating Short at 'F1 + (idn)'. Outook is Stable. Fitch also affirmed the ratings SMF rupiah senior bonds at 'AA (idn)'. A complete list of rankings SMF can be seen at the end of this report. AA (idn)

National ranking in the category of 'AA' indicates the expectation would risk failure very low pay relative to other issuers or securities in Indonesia. Credit risk is only slightly different from issuers or debt securities that are rated the highest in Indonesia. F1 (idn)

National Rating 'F1' indicates the capacity to pay financial commitments The most powerful in a timely manner relative to other issuers or debt securities in Indonesia. National rating scale of Fitch, the ratings given the lowest default risk relative to the rest of Indonesia. If specific liquidity profile is strong, a "+" is added to the ratings given.

ADVISORY RANKING

SMF's ratings reflects Fitch's expectation for the support ekstraordinari Indonesian government, if necessary. It is based the development of policies SMF role in developing the housing market secondary in Indonesia and 100% government ownership of SMF. SMF rating also take into account the absence of an explicit guarantee from the government the obligations and interests SMF relatively low systemic compared to the big banks are owned by the government.

Fitch estimates that SMF will develop a portfolio of loans of up to 3 trillion dollars in 2014, which is supported primarily from the issuance of debt securities. total loans to banks and finance companies to grow significantly be 6.2 trillion at the end of 2013 from 4.8 trillion rupiah in late 2012, due to the increasing demand for housing. The entire loan classified as current at the end of 2013.

The role of developing policies to facilitate SMF six securitization domestic mortgage loan portfolio amounted to 3.96 trillion rupiah in From 2009 to 2013. This is in line with the long-term plan to develop the SMF its role as a provider of credit guarantee provider for institutions mortgage loans or the issuance of securitization rather than simply as a provider financing alone.

Fitch expects profitability to remain thin because of their role SMF as a provider of long-term financing for the primary housing market competitive interest rates. Profitability is not the main purpose SMF because the role of public policy SMF SMF was established by the Indonesian government in 2005 and is regulated and supervised by the Minister of Finance.

RATING SENSITIVITIES

Pressure drop in levels may arise when there is a decrease in the tendency esktraordinari government to provide support to the SMF, when SMF play an important role in the development of the lower housing sector, although this is a small place in the medium long shot. though limited by the small size of SMF compared with banks governments and the absence of an explicit guarantee from the government, staging actions positive can be done if the increasing role SMF policy becomes more systemically important and strengthened by more explicit government support.

SMF rankings are as follows ::

Long-Term National Rating affirmed at 'AA (idn)'; Outlook Stable

Short-Term National Rating affirmed at 'F1 + (idn)'

Senior Bond Rating III/2010 affirmed 'AA (idn)'

Senior 2011 Bond Program Rating affirmed 'AA (idn)'

Rating Phase I Program Senior Bonds 2011diafirmasi at 'AA (idn)'

Rating Senior Bonds phase II program in 2012 affirmed at 'AA (idn)'

V/2013 Medium Term Notes affirmed at 'F1 + (idn)'

VI/2013 Medium Term Notes affirmed at 'F1 + (idn)'

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