Fitch Rates Maybank Indonesia’s Senior Sukuk ‘AAA(idn)’, Subordinated Bond ‘AA(idn)’

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JAKARTA  – Fitch Ratings Indonesia has assigned National Ratings to PT Bank Maybank Indonesia Tbk’s (Maybank Indonesia; BBB/AAA(idn)/Stable) proposed issuance of rupiah sharia senior and rupiah subordinated bonds as follows:

– Sharia senior bonds up to a maximum of IDR700bn with a maturity of three years assigned a National Long-Term Rating of ‘AAA(idn)’
– Subordinated bonds up to a maximum of IDR800bn with a maturity of seven years assigned a National Long-Term Rating of ‘AA(idn)’

The rating agency said the bonds are issued under Maybank Indonesia’s existing sharia senior Debt Programme I of up to IDR1trn and subordinated Debt Programme II of up to IDR3trn, to which Fitch had previously assigned National Long-Term Ratings of ‘AAA(idn)’ and ‘AA(idn)’, respectively. The proceeds will be used to support business growth.

‘AAA’ Long-Term 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.

‘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
The proposed senior debt is rated at the same level as Maybank Indonesia’s National Long-Term Rating as it constitutes direct, unsubordinated and senior unsecured obligations of the company and ranks equally with all other unsecured and unsubordinated obligations.

The proposed subordinated debt is rated two notches below Maybank Indonesia’s National Long-Term Rating – one notch for loss severity (reflecting their write-down features), and one notch for non-performance risk (reflecting their subordinated status and coupon and/or principal deferral risk). The notes will represent direct, subordinated and unsecured obligations of the bank and rank equally with all its other unsecured and subordinated obligations.

Maybank Indonesia’s rating reflects Fitch’s view of a high likelihood of timely support from its higher-rated parent, Malaysia-based Malayan Banking Berhad (Maybank; A-/Negative), in time of need. This view is based on Maybank Indonesia’s strategic importance to Maybank’s regional business expansion in south-east Asia, the parent’s majority ownership/control, and a high level of integration with its parent.

It said any changes in the bank’s National Rating would affect these issue ratings. Downward rating pressure may arise from a multi-notch downgrade of the parent’s rating or any developments leading to a weakening of perceived support from the parent, such as major changes to ownership or a significant weakening in the parent’s financial ability, although Fitch believes this to be a remote prospect in the near to medium term. There is no rating upside for the bank’s rating as it is at the top of the scale. (*)

 

The post Fitch Rates Maybank Indonesia’s Senior Sukuk ‘AAA(idn)’, Subordinated Bond ‘AA(idn)’ appeared first on The Insider Stories.

Source: The Insiderstories
Fitch Rates Maybank Indonesia’s Senior Sukuk ‘AAA(idn)’, Subordinated Bond ‘AA(idn)’

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