Fitch Rates WOMF's Programme and Bonds 'AA(idn)'
OREANDA-NEWS. Fitch Ratings has assigned Indonesia-based PT Wahana Ottomitra Multiartha Tbk's (WOMF, 'AA(idn)'/Stable) unsecured senior debt programme 2016 (of up to IDR4.5trn) a National Long-Term Rating of 'AA(idn)'. The agency has also assigned WOMF's programme a National Short-Term Rating of 'F1+(idn)'.
Fitch has also assigned WOMF's proposed rupiah senior unsecured bond tranche I 2016 (up to IDR800bn with a maturity of up to three years, issued under the programme) a National Long-Term Rating of 'AA(idn)' and National Short-Term 'F1+(idn)'. Proceeds from the issue will be used to support business growth.
'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.
'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 programme and bonds are rated at the same level as WOMF's National Long-Term Rating and National Short-Term Ratings, in accordance with Fitch criteria. The issuer ratings reflect a moderate probability of extraordinary support from 68.55%- shareholder PT Bank Maybank Indonesia Tbk (Maybank Indonesia; BBB/AAA(idn)/Stable), since WOMF plays an important role in expanding its parent's consumer business particularly in the motorcycle business in Indonesia. The ratings of the parent are in turn driven by strong support from ultimate parent Malayan Banking Berhad (Maybank; A-/Negative).
The ratings on the programme and debt issue will move in tandem with any changes to WOMF's National Long-Term Rating. Any significant dilution in ownership by - or perceived weakening of support from - the parent would exert downward pressure on the ratings of WOMF, including the possibility of multi-notch downgrades. However, Fitch sees this prospect as remote in the foreseeable future, given its strategic role in expanding its parent's business in Indonesia's consumer financing market. Any changes to the parents' ratings, or a multiple-notch downgrade in the ultimate parent's rating, could also have an impact on the ratings of WOMF.
The rating differential between Maybank Indonesia and WOMF could narrow in the event the parent shares its name with WOMF, develops greater operational integration with the subsidiary, or provides other forms of tangible support to the subsidiary.