December 22, 2017 / 5:25 AM / a year ago

Fitch Takes Rating Actions on Indonesian Corporates on Sovereign Upgrade

(The following statement was released by the rating agency) SINGAPORE, December 22 (Fitch) Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) on PT Pertamina (Persero), PT Perusahaan Listrik Negara (Persero) (PLN) and PT Telekomunikasi Indonesia Tbk (Telkom) to 'BBB' from 'BBB-'. The Outlooks are Stable. The rating actions follow the upgrade of Indonesia's Long-Term IDR to 'BBB' from 'BBB-' on 21 December 2017. Fitch has also removed the Rating Watch Negative on PT Pelabuhan Indonesia III (Persero)'s (Pelindo III) 'BBB-' Long-Term IDR and PT Wijaya Karya (Persero) Tbk's (WIKA) 'BB' Long-Term IDR, and affirmed these ratings with Stable Outlooks. A full list of rating actions is at the end of this rating action commentary. KEY RATING DRIVERS Telkom's standalone credit profile is higher than that of the sovereign but its IDRs are constrained to the sovereign level due to the state's majority shareholding. The ratings of Pertamina and PLN are equalised with Indonesia's IDRs, given their strong linkages with the state and the sovereign's strong incentives to extend support to these entities, as per Fitch's exposure draft on Government Related Entities Criteria published on 27 November 2017 (see <a href=" here">Fitch Publishes Exposure Draft on Government Related Entities Criteria. The ratings of these entities are not likely to change even after the finalisation of the exposure draft, if the final criteria are substantially similar to the exposure draft. Please see the following rating action commentaries for the full rating rationales and disclosures for the respective issuers: - <a href="">Fitch Affirms Indonesia's Pertamina at 'BBB-'; Outlook Positive, dated 7 June 2017 - <a href="">Fitch Affirms PLN at 'BBB-'; Assigns USD Notes Final Ratings, dated 16 May 2017 - <a href="">Fitch Affirms Indonesia's Telekom at 'BBB-'; Outlook Positive, dated 11 July 2017 The removal of the Rating Watch Negative on the ratings on Pelindo III and WIKA reflects Fitch's expectation that these ratings are likely to remain unchanged even after the finalisation of the exposure draft, following the sovereign rating upgrade, and if the final criteria are substantially similar to the exposure draft. Please see the following rating action commentaries for the full rating rationales and disclosures for the respective issuers: <a href="">Fitch Publishes Wijaya Karya at 'BB'/'AA(idn)', dated 22 September 2017 <a href="">Fitch Revises Outlook on Indonesia's Pelindo III, Affirms at 'BBB-', dated 12 April 2017 Fitch has not taken any rating action on PT Perusahaan Gas Negara Tbk (BBB-/Positive) and PT Pelabuhan Indonesia II (Persero) (BBB-/Positive). The ratings of these two entities will be reviewed upon finalisation of the exposure draft on Government Related Entities Criteria in the next six months. Please see the following rating action commentaries for the full rating rationales and disclosures for the respective issuers: <a href="">Fitch Affirms Indonesia's PGN at 'BBB-'; Outlook Positive, dated 17 April 2017 <a href="">Fitch Affirms Indonesia's Pelindo II at 'BBB-'/Positive, dated 12 April 2017 DERIVATION SUMMARY Not applicable KEY ASSUMPTIONS Not applicable RATING SENSITIVITIES Please see the relevant rating action commentary for each issuer listed above. LIQUIDITY Please see the relevant rating action commentary for each issuer listed above. FULL LIST OF RATING ACTIONS PT Pertamina (Persero) - Long-Term Foreign-Currency IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable- Senior unsecured rating upgraded to 'BBB' from 'BBB-' - USD10 billion global medium-term note programme and existing senior unsecured notes upgraded to 'BBB' from 'BBB-' PT Perusahaan Listrik Negara (Persero) - Long-Term Foreign Currency IDR upgraded to 'BBB' from 'BBB-'; Outlook Stable - Senior unsecured rating and the rating on its outstanding bonds upgraded to 'BBB' from 'BBB-'. - The outstanding US dollar notes issued by Majapahit Holding BV, a wholly-owned special-purpose subsidiary of PLN, and guaranteed by PLN upgraded to 'BBB' from 'BBB-'. PT Telekomunikasi Indonesia Tbk - Long-Term Foreign- and Local-Currency IDRs upgraded to 'BBB' from 'BBB-'; Outlook Stable - Senior unsecured rating upgraded to 'BBB' from 'BBB-'. PT Pelabuhan Indonesia III (Persero) - Long-Term IDR off Rating Watch Negative and affirmed at 'BBB-'; Outlook Stable - Senior unsecured rating and the rating on the USD500 million senior unsecured notes due 2024 off Rating watch Negative and affirmed at 'BBB-' PT Wijaya Karya (Persero) Tbk - Long-Term IDR off Rating Watch Negative and affirmed at 'BB'; Outlook Stable Contact: Primary Analysts Hasira De Silva, CFA (WIKA) Director +65 6796 7240 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Janice Chong (Telkom) Director +65 6796 7241 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Muralidharan R (Pertamina) Director +65 6796 7236 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Rachna Jain (PLN, Pelindo III) Associate Director +65 6796 7227 Fitch Ratings Singapore Pte Ltd One Raffles Quay, South Tower #22-11 Singapore 048583 Secondary Analysts Salman Alamsyah (WIKA, Pelindo III) Analyst +62 21 2988 6818 Nitin Soni (Telekom) Director +65 6796 7235 Rachna Jain (Pertamina) Associate Director +65 6796 7227 Muralidharan R(PLN) Director +65 6796 7236 Committee Chairperson Kalai Pillay Senior Director +65 7296 7221 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: Additional information is available on Applicable Criteria Corporate Rating Criteria (pub. 07 Aug 2017) here Exposure Draft: Corporate Rating Criteria (pub. 14 Dec 2017) here Exposure Draft: Government-Related Entities Rating Criteria (pub. 27 Nov 2017) here Parent and Subsidiary Rating Linkage (pub. 31 Aug 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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