OREANDA-NEWS. Fitch Ratings Indonesia has assigned Indonesia-based PT Toyota Astra Financial Services' (TAFS; AAA(idn)/Stable) senior unsecured debt programme of up to IDR5trn a National Long-Term rating of 'AAA(idn)' and a National Short-Term rating of 'F1+(idn)'.

Fitch has also rated TAFS's proposed rupiah senior unsecured bond, the first tranche to be issued under the programme, as follows:
- bonds with maturity of 36 months assigned National Long-Term Rating of 'AAA(idn)'
- bonds with maturity of 370 days assigned National Short-Term Rating of 'F1+(idn)'

The bond issue will be up to IDR1.5trn in size and the proceeds will be used to support the company's business growth.

'AAA' 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' 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 bond issues under the programme are rated at the same level as TAFS's National Ratings in accordance with Fitch criteria.

TAFS's ratings reflect its strong support from Toyota Financial Services Corporation (TFSC), one of its two major shareholders. TFSC is a wholly owned subsidiary of Toyota Motor Corporation (TMC; A/Stable), one of the biggest automotive manufacturers in the world. As part of the Toyota group, TAFS benefits from product knowledge and funding support. The latter is derived from TMC's strong relationship with Japanese banks and Japanese government-backed financial institutions.

TAFS also benefits from support from PT Astra International Tbk (AI), the other major shareholder, particularly in dealership networks. AI is a leading car distributor in Indonesia and holds exclusive rights to sell Toyota vehicles in the country.

RATING SENSITIVITIES
Any reduction in Toyota Motor Corporation's (TMC) ownership of TAFS or a decline in support from TMC and PT Astra International Tbk (AI) would exert downward pressure on TAFS's ratings. However, Fitch sees this prospect as remote in the foreseeable future, given TAFS's strategic role in TMC's and AI's Toyota car financing business. There is no rating upside as the rating is already at the top of the scale.

Any changes in TAFS's National Long-Term and Short-Term ratings would affect these issue ratings.