OREANDA-NEWS. June 10, 2015. Fitch Ratings Indonesia has assigned ratings to Indonesia-based PT Astra Sedaya Finance's (ASF; AAA(idn)/Stable) proposed senior unsecured bonds, the fifth tranche to be issued this year under the programme, as follows:

- bonds with maturity of three years assigned a National Long-Term Rating of 'AAA(idn)'
- bonds with maturity of 370 days assigned a National Short-Term Rating of 'F1+(idn)'.

The bond issue will be up to IDR1.575trn in size and the proceeds will be used to support the company's business growth.

'AAA' National Long-Term 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' National Short-Term 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 ASF's National Long-Term and Short-Term Ratings in accordance with Fitch criteria.

ASF's ratings reflect Fitch's expectation of a high probability of support from its majority shareholder, PT Astra International Tbk (AI). Fitch considers ASF as a strategically important subsidiary of AI, as ASF accounts for a sizeable portion of the parent's automobile credit sales. The support also reflects AI's 86% effective ownership as well as ASF's strong synergies and integration with the parent. AI is the largest automobile manufacturer and distributor with a 51% share of the market in Indonesia by new car sales.

Fitch expects ASF to continue delivering healthy profitability in 2015 in spite of a challenging economic environment, underpinned by its manageable credit and funding costs.

RATING SENSITIVITIES

Any changes in ASF's National Long-Term and Short-Term Ratings would affect the issue ratings.

Any significant decline in AI's ownership and/or ASF's contribution to AI would exert downward pressure on its National ratings. However, Fitch believes this scenario is unlikely in the foreseeable future, given ASF's strategic importance to AI's automotive business. ASF's ratings are also sensitive to Fitch's assessment of AI's credit profile; any change in the assessment will likely lead to a review of ASF's ratings.