Fitch Ratings Jakarta 03 August 2016: Fitch Ratings Indonesia has assigned National Ratings to PT BFI Finance Indonesia Tbk's (BFI, A+(idn)/Positive/F1(idn)) proposed rupiah senior unsecured bonds as follows:
Bonds issued under the first tranche will be up to IDR1trn in size, with a maturity of up to three years. The proceeds from the bond programme will be used mainly to support the company's business growth.
'A' National 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 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 BFI's National Long-Term and Short-Term Ratings in accordance with Fitch criteria.
BFI's National Ratings are driven by its standalone performance as one of the largest independent finance companies in Indonesia. BFI has had a solid financial record during the last five years: capitalisation has remained high, with its equity-to-assets ratio continuing to be one of the highest in Indonesia's multi-finance industry. Fitch believes BFI will maintain leverage at among the lowest of its peers.
Deterioration in asset quality that could impact the profitability and capitalisation is likely to result in the Outlook being revised to Stable or a rating downgrade in the event of a significant weakening of asset quality.
Sustainable growth that results in a greater market share while maintaining solid asset quality may lead to a rating upgrade.
The ratings on the bonds will move in tandem with changes to BFI's National Long-Term and Short-Term Ratings.
Date of Relevant Rating Committee: 1 December 2015
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 Fitchratings.
Global Non-Bank Financial Institutions Rating Criteria (pub. 15 Jul 2016)
National Scale Ratings Criteria (pub. 30 Oct 2013)
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