RPT-Fitch Rating Senior Sukuk and Bonds Subordinated BII

Mon Jun 23, 2014 4:02am EDT

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June 23 (Reuters) - (The following statement was released by the rating agency)

Fitch Ratings has set ranks to plan a program of Islamic bonds (sukuk) and program subordinated bonds of PT Bank Internasional Indonesia Tbk (BII; AAA (idn) '/ Stable) and also for debt securities that will be issued in the first stage under these programs. The ratings are as follows:

- Sustainable Sukuk Programme 2014 is a maximum of 1 trillion dollars, set National Long-Term rating at 'AAA (idn)'

- Phase I 2014 Sukuk with maturities of three years, assigned ratings

The National Long-Term 'AAA (idn)'

- Sustainable Subordinated Bonds program in 2014 for a maximum of 3 trillion rupiah, set the National Long-Term rating at 'AA (idn)'

- Subordinated Bonds of Phase I in 2014, a period of seven years, assigned National Long-Term rating at 'AA (idn)'

The first stage is the issuance of sukuk amounting to a maximum of 300 billion dollars and The first stage is subordinated bonds amounting to a maximum of 1.5 trillion dollars. The bond proceeds will be used to support business growth peruasahaan. AAA (idn)

National ranking in the category of 'AAA' denotes the highest rank Fitch on national rating scale for Indonesia. this ranking provided to an issuer or debt securities with the expectation of default risk the lowest relative to other issuers or securities in Indonesia. 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.

ADVISORY RANKING

Sukuk rated at the same level with the Long-Term National Rating Bank International Indonesia because the debt reflects liability company that is direct, not a subordinated debt and are senior unsecured obligations and liabilities equivalent to all senior unsecured and other debts.

Subordinated bonds rated two notches below the national rankings BII - one notch for loss severity (reflecting the conversion feature of capital complementary to the ordinary shares or write down) and one notch for risk non-performance (reflecting the subordinated status and the risk of delays payment of principal and / or interest). This subordinated debt is an obligation which is direct, tersubrodinasi, the same is not guaranteed and rated subrodinasi other debt obligations.

BII ratings reflect Fitch's view of the high potential of the support appropriate time - when required majority of shareholders based on Malaysia, Malayan Banking Berhad (Maybank, A-/Negatif) were rated more high. This view is based on the strategic role of BII on growth Maybank's regional business in Southeast Asia, and the majority shareholding high integration with the majority shareholders.

BII's asset quality is maintained with the NPL ratio of 2.1% in end of March 2014 and 2013. Capitalization core banks are under the average industry by 18%, with a core capital ratio of 10% at the end of March 2014. Fitch believes that the bank will require a capital injection from shareholders to support business growth. The ratio of net income to assets down amounted to 0.6% in the first quarter of 2014 (2013: 1.3%), below the average industry by 2.9%. Fitch believes that the profitability of banks will under pressure with a more challenging economic conditions.

SENSITIVITY RATINGS

Changes at the national level BII will impact on the debt. Pressure drop in ranking can happen if there is a direct development in lower shareholder support, such as a major change to ownership or a significant weakening of the financial capacity stock, although Fitch believes that this will not happen in the near-term until secondary. BII National level rise is not expected because it is are at the highest level of national scale

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