Fitch Rates UOBI's Senior Bond 'AAA(idn)'
- bonds with maturity of three and five years assigned National Long-Term Rating of 'AAA(idn)'
- bonds with maturity of 370 days assigned National Short-Term Rating of 'F1+(idn)'.
The bond issue will be up to IDR1.5trn in size and the proceeds will be used to support the company's business growth.
'AAA' National Long-Term 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.
'F1' National Short-Term 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 bonds are rated at the same level as UOBI's National Long-Term and Short-Term Ratings in accordance with Fitch's criteria.
UOBI's rating reflects Fitch's view of a high likelihood of timely support from its higher-rated parent, Singapore-based United Overseas Bank Limited (UOB, AA-/Stable), in time of need. This view is based on UOBI's strategic importance to UOB's business expansion in south-east Asia, 99% ownership, name association, and operational alignment in most key areas.
Any changes in UOBI's National Ratings would affect the issue ratings.
There is no rating upside for UOBI's National Ratings as it is already at the top of the scale.
Downward rating pressure may arise from any developments leading to a weakening of perceived support from UOB, 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. Deterioration in UOBI's standalone financial profile is unlikely to impact its National Rating unless the factors underpinning the parent's support also weaken.