RPT-Fitch Rates Senior Bond from Indonesia's ASF 'AAA(idn)'

Fri Mar 14, 2014 2:49am EDT

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March 14 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has assigned ratings to Indonesia-based PT Astra Sedaya Finance's (ASF; AAA(idn)/Stable) proposed senior unsecured bonds, the third tranche to be issued this year under the programme, as follows:

- bonds with maturity of three and four years assigned National Long-Term Rating of 'AAA(idn)'

- bonds with maturity of 370 days assigned National Short-Term Rating of 'F1+(idn)'.

The bond issue will be up to IDR1.95trn in size and the proceeds will be used to support the company's business growth.

'AAA' National Long-Term Ratings denote the highest rating assigned by Fitch on its national rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country.

'F1' National Short-Term Ratings indicate the strongest capacity for timely payment of financial commitments relative to other issuers or obligations in the same country. On Fitch's National Rating scale, this rating is assigned to the lowest default risk relative to others in the same country. Where the liquidity profile is particularly strong, a "+" is added to the assigned rating.

KEY RATING DRIVERS

The bonds are rated at the same level as ASF's National Long-Term and Short-Term Ratings. This is because they constitute direct, unsubordinated and senior unsecured obligations of ASF and rank equally with all other unsecured and unsubordinated obligations.

ASF's ratings reflect Fitch's expectation of continued strong support and commitment from its majority shareholder, PT Astra International Tbk (AI).

Fitch's classification of ASF as a core subsidiary of AI captures ASF's strategic importance to the parent's car manufacturing and distributing business in Indonesia. ASF provides direct financing services for buyers who purchase AI's cars, playing an important role in supporting AI's sales.

RATING SENSITIVITIES

Any changes in ASF's National Long-Term and Short-Term ratings would affect the issue ratings.

A drop in contribution by ASF to AI would also be negative for their ratings. A significant decline in AI's ownership and deterioration in its performance or support would also exert downward pressure on the ratings of ASF, although Fitch sees this prospect as remote in the foreseeable future, given the importance of ASF to AI's core car business. There is no rating upside as the rating is already at the top of the scale.

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