OREANDA-NEWS. Fitch Ratings Indonesia has assigned National Ratings to PT BFI Finance Indonesia Tbk's (A+(idn)/Stable/F1(idn)) proposed rupiah senior unsecured bonds as follows:

- Bonds with a maturity of two and three years assigned a National Long-Term Rating of 'A+(idn)'; and
- Bonds with a maturity of 370 days assigned a National Short-Term Rating of 'F1(idn)'.

The bonds are to be issued under BFI's existing senior debt programme II of up to IDR2.5trn, to which Fitch has assigned National Long-Term and Short-Term Ratings of 'A+(idn)' and 'F1(idn)', respectively. The issue will be up to IDR1trn in size and the proceeds will be used 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 had a solid financial record during the last past five years. BFI's capitalisation 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 its leverage which is among the lowest of its peers.

RATING SENSITIVITIES

Any changes in BFI's National Ratings would affect the issue ratings.

Any significant deterioration in BFI's profitability, capitalisation and asset quality is likely to exert downward pressure on its ratings. A rating upgrade is less likely given its reliance on wholesale funding - leading to inherently higher liquidity risk.