OREANDA-NEWS. Fitch Ratings Indonesia has assigned a National Rating of 'AA+(idn)' to PT Maybank Indonesia Finance's (MIF, AA+(idn)/Stable) issue of rupiah senior unsecured bonds as follows:

- Bonds with a maturity of three years assigned a National Long-Term Rating of 'AA+(idn)'
- Bonds with a maturity of five years assigned a National Long-Term Rating of 'AA+(idn)''

The bonds are issued under MIF's existing senior Debt Programme II of up to IDR5trn, to which Fitch previously assigned National Long-Term and Short-Term Ratings of 'AA+(idn)' and 'F1+(idn)', respectively. The issue size is IDR1.1trn in total, and the proceeds 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
SENIOR DEBT
The bonds are rated at the same level as MIF's National Long-Term Ratings in accordance with Fitch criteria.

The ratings are driven by Fitch's view that the parent of MIF would provide timely support to its subsidiary, should it be needed. MIF plays an important role in expanding its parent's consumer business in Indonesia.

Fitch views MIF as a strategically important subsidiary of PT Bank Maybank Indonesia Tbk (Maybank Indonesia; BBB/AAA(idn)/Stable), because of their strong linkages. This is evident from the parent's full ownership and name sharing with its subsidiary, strong operational alignment, provision of funding support to the subsidiary and the significant contribution that MIF makes to its parent's loan portfolio. The ratings of the parent are in turn driven by strong support from Malayan Banking Bhd (Maybank; A-/Negative).

RATING SENSITIVITIES
SENIOR DEBT
The ratings on the debt issue will move in tandem with any changes to MIF'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 MIF, 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 parent's rating, or a multiple notch downgrade in the ultimate parent's rating, could also impact on the ratings of MIF.

Rating upside could arise if Fitch were to perceive MIF as a core subsidiary of Maybank Indonesia. This would likely result in an equalisation of MIF's ratings with its parent's national ratings, based on Fitch criteria. Evidence of stronger integration between parent and subsidiary, and higher contribution to its parent's assets and income on a sustainable basis could lead us to equalise the ratings.