Fitch Rates Indonesia-based WOM Finance's Senior Bonds 'AA(idn)'

Sun May 11, 2014 10:12pm EDT

Related Topics

(The following statement was released by the rating agency) JAKARTA, May 11 (Fitch) Fitch Ratings has assigned National Ratings to Indonesia-based PT Wahana Ottomitra Multiartha Tbk's (WOM Finance; AA(idn)/Stable/F1+) proposed rupiah senior unsecured bonds as follows: - bonds with maturity of three years assigned National Long-Term (LT) Rating of 'AA(idn)', and - bonds with maturity of 370 days assigned National Short-Term (ST) Rating of 'F1+(idn)'. The bonds are the first tranche to be issued under WOM Finance's proposed 2014 senior debt programme of up to IDR3trn, to which Fitch has assigned National LT and ST Ratings of 'AA(idn)' and 'F1+(idn)', respectively. The bond issue will be up to IDR600bn in size and the proceeds will be used to support the company's business growth. 'AA' National Long-Term Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher rated category. '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 debt programme and bonds issued under the programme are rated at the same level as WOM Finance's National LT and ST Ratings. This is because they constitute direct, unsubordinated and senior unsecured obligations of WOM Finance and rank equally with all other unsecured and unsubordinated obligations. WOM Finance's ratings reflect Fitch's expectation that the company will continue to benefit from on-going funding support from PT Bank Internasional Indonesia Tbk (BII; BBB/AAA(idn)/Stable), which holds 62% of WOM Finance's shares. The ratings also reflect relatively moderate linkage with BII and a moderate probability of extraordinary support from BII, if needed. BII is owned by Malayan Banking Berhad (Maybank, A-/Negative), RATING SENSITIVITIES Any significant dilution in ownership by, or perceived weakening of support from BII and Maybank would exert downward pressure on the ratings on WOM Finance, including the possibility of multi-notch downgrades. However, Fitch sees this prospect as remote in the foreseeable future, given WOM Finance's strategic role in expanding its BII and Maybank's business exposure in Indonesia's fast-growing consumer financing market. Any changes in WOM Finance's National LT and ST ratings would affect the issue ratings. Contacts: Primary Analyst Stefanus Yuniardhi Associate Director +62 21 2988 6809 PT Fitch Ratings Indonesia DBS Bank Tower 24th Floor, Suite 2403 Jl. Prof. Dr. Satrio Kav 3-5 Jakarta, Indonesia 12940 Committee Chairperson Jonathan Lee Senior Director +886 2 8175 7601 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(idn)' for National ratings in Indonesia. Specific letter grades are not therefore internationally comparable. Additional information is available at www.fitchratings.com. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014, "Finance and Leasing Companies 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. 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 AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S 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.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.