February 24, 2014 / 2:36 AM / in 4 years

Fitch Rates Federal International Finance's Senior Bond 'AAA(idn)'

(The following statement was released by the rating agency) JAKARTA/TAIPEI/SINGAPORE, February 23 (Fitch) Fitch Ratings has assigned National Ratings to Indonesia-based PT Federal International Finance's (FIF; AAA(idn)/Stable) proposed rupiah senior unsecured bonds as follows: - bonds with maturity of three years assigned National Long-Term (LT) Rating of 'AAA(idn)', and - bonds with maturity of 370 days assigned National Short-Term (ST) Rating of 'F1+(idn)'. The bond issue will be up to IDR1.55trn in size and the proceeds will be used to support the company's business growth. The bonds are the third tranche to be issued under its existing senior debt programme 2012 of up to IDR10trn. 'AAA' Long-Term National 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' Short-Term National 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 and debt programme are rated at the same level as FIF's National LT and ST Ratings. This is because they constitute direct, unsubordinated and senior unsecured obligations of FIF and rank equally with all other unsecured and unsubordinated obligations. FIF's ratings reflect Fitch's expectation that the company will continue to benefit from strong support and commitment from its majority shareholder, PT Astra Internasional Tbk (AI). Fitch's classification of FIF as a core subsidiary of AI captures FIF's importance to the parent's motorcycle manufacturing and distributor business in Indonesia. FIF provides direct financing services for the purchase of Honda motorcycles produced by Astra Honda Motor, a 50-50 joint venture between AI and Honda Motor Company Ltd (A/Stable). RATING SENSITIVITIES Any significant decline in AI's ownership, performance or support, and weakening of FIF's contribution to AI would exert downward pressure on FIF's ratings. There is no rating upside as the rating is already at the top of the scale. Any changes in FIF'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 +62 21 2988 6809 Secondary Analyst Iwan Wisaksana Director +62 21 2988 6807 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.

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