Fitch Rates Maybank Indonesia Finance's Bonds 'AA+(idn)'
The bonds, which will be issued under MIF's bond programme, will have a maturity of up to five years. Proceeds from the issue will be used to support the company's growth.
'AA' 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.
KEY RATING DRIVERS
SENIOR DEBT
The bonds are rated at the same level as MIF's National Long-Term Ratings in accordance with Fitch criteria.
The ratings are driven by Fitch's view that MIF's parent, PT Bank Maybank Indonesia Tbk (Maybank Indonesia; BBB/AAA(idn)/Stable), would provide timely support to its subsidiary, if needed. MIF plays an important role in expanding its parent's consumer business in Indonesia.
Fitch views MIF as a strategically important subsidiary of Maybank Indonesia because of their strong linkages. This is evident from the parent's full ownership and name sharing with its subsidiary, strong operational alignment, funding support and the significant contribution MIF makes to its parent's loan portfolio. The ratings of Maybank Indonesia are in turn driven by strong support from its parent, Malayan Banking Berhad (Maybank; A-/Stable).
RATING SENSITIVITIES
SENIOR DEBT
The ratings on the debt issue will move in tandem with any changes to MIF's National Long-Term Rating. A significant dilution in ownership by the parent or perceived weakening of support for MIF would exert downward pressure on MIF's ratings, including the possibility of multi-notch downgrades. However, Fitch sees this prospect as remote due to MIF's strategic role in expanding its parent's business in Indonesia's consumer finance market.
Rating upside could arise if Fitch were to perceive MIF as a core subsidiary of Maybank Indonesia. This would likely result in an equalisation of MIF's ratings with its parent's national ratings, based on Fitch criteria. This could occur if there is evidence of stronger integration between parent and subsidiary and a higher contribution to the parent's assets and income on a sustainable basis.
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