pemeringkatan bumn - djppr

Pemeringkatan BUMNEddy Handali, CFA

December 2017

12/14/2017

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www.fitchratings.com

Fitch Ratings Indonesia

Ratings & Process

Rating Framework

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Credit Ratings

“Fitch's credit ratings provide an opinion on the relative ability of an entity to

meet financial commitments, such as interest, preferred dividends,

repayment of principal, insurance claims or counterparty obligations. Credit

ratings are used by investors as indications of the likelihood of receiving

their money back in accordance with the terms on which they

invested.”

Assigned to:

� Issuer – Corporate and Sovereign

� Debt instruments such as bond, sukuk and others

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� In 2005, First global credit rating

agency (CRA) to establish a

presence in Indonesia.

� In 2006, PT Fitch Ratings Indonesia

obtained a OJK (Bapepam-LK)

license to assign national ratings.

� Only international credit rating

agency accredited by the regulators

in Indonesia to assign ratings to local

currency debt issues in the domestic

market.

� Only rating agency that is able to

provide international and national

ratings in one rating process &

research report.

Fitch Ratings

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Brief Introduction

• Fitch celebrated its 100th year anniversary in Dec 2013, with dual

headquarters in London and New York.

• Globally, Fitch employs 2000 professionals spread in 50 countries, covering

3700 financial institution issuers, 1700 corporate, 1200 insurers and 104

sovereigns

• Fitch was the first to introduce the AAA – D rating scale in 1024

• Fitch is the first and only international rating agency with on-the-ground

presence in Indonesia.

• Fitch now maintains public ratings on 96 issuers (including sovereign) in

Indonesia, comprising 83 national ratings and 39 international ratings.

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As of August 2012

Global Presence

Mumbai

MonterreyMexico City

San Jose

San Salvador

Lima

Santiago

La Paz

Quito

São Paulo

Buenos Aires

Bogota

Milan

BarcelonaTunis

Kent

Madrid

Rio de Janeiro

Montevideo

Caracas

Istanbul

Paris

FrankfurtWarsaw

Moscow

Sandton

Bangalore

Hyderabad

Colombo

Tokyo

Hong Kong

Seoul

Bangkok

Taipei

Beijing

Singapore

Sydney

Kolkata

Chennai

NewDelhi

Jakarta

DubaiGuatemala

Toronto

New York

Chicago

San Francisco

Austin

Stockholm

ShanghaiLondon

• Fitch is a global ratings agency with 51 offices worldwide and over 2,000 employees

• In Asia-Pacific, Fitch has 17 offices

• With extensive Emerging Markets presence, Fitch is able to integrate international best practice with local

market knowledge

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Indonesia’s Coverage

17 21 23 29 29 35

3135 38

40 4449

77

7

1212

13

2012 2013 2014 2015 2016 11M17

Corporate Financial Institution Insurance

1621 21 23 24

3510

12 1213 14

14

0

1 13

3

2

2012 2013 2014 2015 2016 11M17

Corporate Financial Institution Insurance

National Scale

International Scale

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Rating Scale

International Scale

� Fund raising activities in

international capital

markets

National Scale

� National rating is defined

to serve the needs of a

local market. Mostly, it is

used in fund raising

activities in local capital

market.

� Using modified symbols

XXX(idn)

Comparisons among different national scales or to the international

scale are inappropriate and potentially misleading.

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Dual Ratings

Companies International Scale National Scale

PT Bank Mandiri Tbk BBB-/Stable AAA(idn)/Stable

PT Sarana Multi

Infrastruktur

BBB-/Stable AA+(idn)/RWP

PT Bank Negara

Indonesia Tbk

BBB-/Stable AA+(idn)/Stable

PT Wijaya Karya Tbk BB/Stable AA(idn)/Stable

PT Reasuransi

Nasional Indonesia

BB-/Stable AA-(idn)/Stable

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Rating Definition (National Scale)

AA+

AA

AA-

A+

A

A-

BBB+

BBB

BBB-

AAALowest expectation of

default risk

Very low default risk

Low default risk

Moderate default risk

BB+

BB

BB-

B+

B

B-

D

CCC

C

CC

RD

Elevated default risk

Significantly elevated default

risk

Default is a real possibility

Default of some kind appears probable

Default is imminent

Restricted default

Default

National scale ratings are an opinion of creditworthiness relative to the universe

of issuers and issues within a single country.

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Rating Process

� Activity: The agency reviews the strength of an issuer‘s business and

financial risk profile relative to that of others

� Key Factors:

� Capable Analysts

� Robust and Transparent Criteria

� Sufficient information

.

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Rating Process

Perform

in-depth

Analysis

& Prepare a

Comprehensive

ReportCollect

Information

3

Appoint

the

analyst

2

Monitoring

Assign ratings,

Communicate

Result

Hold ratings

committee

5

4

1

Timing and order of steps may vary

6

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Criteria

Master Rating Criteria

� Global Bank

� Global Non Bank FI� Public-Sector Entities� Corporate� Insurance

Cross Sector Rating Criteria

� Parent and Subsidiary Linkage

� Partial Corporate Guarantee� National Scale Rating Criteria

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Stand-Alone Standalone Credit Profile Standalone Strength

Rating Framework

Key Factors:- Operating Environment- Company Profile- Management/Strategy- Risk Appetite- Financial Profile- Cash flow- Financial Flexibility

+ Support Likelihood of external support made

available to prevent a default

Key Factors:- Ability to

support- Propensity

to support

- Strength of Linkage

- Incentive to Support

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Rating Basis of Indonesian Companies

Stand-alone Sovereign Support Institutional Support

Bank Central Asia Bank Mandiri Bank ANZ Indonesia

Bank Danamon Indonesia Bank Negara Indonesia Bank BRISyariah

Bank Mayapada Lembaga Penjamin

Simpanan

Bank CIMB Niaga

Bank Muamalat Indonesia BPD Maluku Bank Commonwealth

Protelindo Pupuk Indonesia XL Axiata

Mayora Indah Waskita Karya Ciputra Residence

Japfa Comfeed Pelabuhan Indonesia I Astra Otoparts

Bumi Serpong Damai Sinar Mas Agro Resources

and Technology

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Industry Risk:Expansion/Consolidation

trends, Capacity

Structure: Relationship between parents & subsidiaries, Stand

Alone/Support

Cash Flows: Short term vs Long term, Impacts to

Profit & lLquidity, Sustainability Level,

Coverage

Capital Structure: Funding, Leverage

Financial Flexibility:Ability to redeploy assets

and revise plans,

Degree of access to range of debt & equity markets

Competitive Position: Market Position, Suppliers/Buyers Bargaining Power

Management: Track Record, Operating

Strategy, Risk Tolerance, Financial Policies,

Resource Availability

Operating Environment:Macroeconomics, Country

& Currency Risk

Qualitative Quantitative

Standalone Ratings

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Profile & Operating Environment: Overview of group strategy, Expansion Plans, Market Positioning

Templates: Fitch Liquidity template, Fitch capital

template

Holding Company Analysis: Holdco financial

statements, Holdco budgets/forecasts, Maturirtyprofile of assets & liabilities

Ownership, Support & Group Factors:

Shareholders, Support agreements, Formal inter-

group guarantees

Financial Profile: Performance, Funding & liquidity, Capitalisation &

leverage

Risk Management: Credit risk, Property finance,

Impaired loans, Securities holdings, Market risk,

Operational risk

Regulation/Legislation:Impact of Basel Committee rules on Capital & Liquidity, Risk weights for market &

counterparty risk, Recovery & resolution plans

Issuer

Standalone Ratings

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Propensity to Support

Strength of Linkage

� Status, Ownership and

Control

� Support Track Record and

Expectations

Incentive to Support

� Socio-Political Implication

of the SOE’s Default

� Financial Implications of

the SOE’s Default

- Type of SOE : a public mission or a corporate mission

- Assessment of the Factor: Very Strong, Strong, Moderate, Weak

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Notching Approach

� Equalized: SOEs’ IDR = Government’s IDR

� Top down minus 1, 2, 3: SOE’s IDR is a few notches lower than the

government’s IDR

� Bottom up plus 1, 2, 3: SOE’s IDR is a few notches above the SOE’s

standalone credit profile

� Standalone: SOE’s IDR = SOE’s standalone credit profile

� Constrained: When the SOE’s standalone credit profile is capped at

the government’s IDR

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Notching Approach

Equalized Top-Down Bottom-Up Standalone Constraint

Pertamina Bank Negara

Indonesia

Pelabuhan

Indonesia I, II, III

Perusahaan

Gas Negara*

Perusahaan

Listrik Negara

Bank

Tabungan

Negara

Angkasa Pura I Angkasa

Pura II*

Pupuk

Indonesia

Bank

Pembangunan

Daerah

Waskita Karya

Tbk

Lembaga

Penjamin

Simpanan

Wijaya Karya

Tbk

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Rating Constraint

� When an SOE’s standalone profile is above the government’s IDR,

the IDR of the SOE is likely to be constrained at the government’s

IDR level.

Countries International Scale

Singapore AAA / Stable

Malaysia A- / Stable

Thailand BBB+ / Stable

Philippine BBB / Stable

Indonesia BBB- / Positive

Vietnam BB- /Positive

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Companies International Rating

National Rating

PT Indosat Tbk BBB+ / Stable AAA(idn)

PT XL Axiata Tbk BBB / Stable AAA(idn)

PT Telekomunikasi Indonesia Tbk ? ?

Rating Constraint

� When an SOE’s standalone profile is above the government’s IDR,

the IDR of the SOE is likely to be constrained at the government’s

IDR level.

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Instrument Ratings

Subordinated BondsUsually Notched off from Issuer Rating

Issuer PT Bank UOB Indonesia

Issuer Rating AAA(idn)/Stable

Issue Subordinated Bonds

Issue Rating AA(idn)

Size IDR1 trillion

Senior BondsUsually Equalized with Issuer Rating

Issuer PT Pelabuhan Indonesia I

Issuer Rating AA(idn)/Stable

Issue Senior Bonds

Issue Rating AA(idn)

Size IDR1 trillion

The rating on Pelindo I's bonds is sensitive to changes to the company's senior unsecured rating, which will move in line with changes in Pelindo I's National Long-Term Rating.

The proposed subordinated bonds are rated two notches below the bank’sNational Long-Term Rating - one notch for loss severity to reflect their subordination and write-down features, and another notch for non-performance risk to reflect coupon and principal deferral risk

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Instrument Ratings

Senior BondsIssuer has high secured debt

Issuer PT Waskita Karya

Issuer Rating ‘A(idn)’/Stable

Issue Senior Bonds

Issue Rating ‘A-’(idn)

Size IDR3 trillions

Senior BondsIssued with Partial Guarantee

Issuer PT Ciputra Residence

Issuer Rating ‘A+(idn)’/Stable

Issue Senior Bonds

Issue Rating ‘AA-’(idn)

Size IDR300 billions

Bonds Rated Below National Rating: The issuance

are rated one-notch below the company's National

Long-Term Rating of 'A(idn)' due to its high secured

debt/EBITDA ratio, which reflects our expectation

that the recovery of the unsecured debt will be low in

a distressed scenario.

The rating is based on a partial credit guarantee for

20% of the principal amount offered by the

International Finance Corporation. The partial

guarantee reduces the loss severity in case of

default, raising the issuance's rating by one notch

above Ciputra Residence's rating.

New York One State Street Plaza New York, NY 10004

London 30 North Colonnade Canary WharfLondon E14 5GN

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