Fitch rates Federal International debt AAA(idn)

Fitch Ratings Indonesia said it assigned PT Federal International Finance's (AAA(idn)/stable) senior unsecured debt program of up to Rp. 10 trillion a national long-term rating of AAA(idn) and a national short-term rating of F1+(idn).

The agency also assigned an AAA(idn) national long-term rating to the proposed senior unsecured bonds with maturity of three years and an F1+(idn) national short-term rating to the proposed bonds with maturity of 370 days.

The issue will be up to Rp. 3 trillion, which will be used to support the company's business growth. The bonds are the first tranche to be issued under the new program.

The bonds are rated at the same level as Federal International’s national long-term and short-term ratings, in accordance with the agency’s criteria.

Fitch said the ratings reflect its expectation that Federal International will receive support from its parent, PT Astra International Tbk., in time of need. This is based on Federal International’s significant contribution to Astra International’s core motorcycle business and the parent's almost 100% ownership of Federal International. As an integral part of Astra International’s motorcycle business chain, Federal International has an important role in providing direct financing services for the purchase of Honda motorcycles produced by Astra Honda Motor, a 50-50 joint venture between Astra International and Honda Motor Co. Ltd. (A/stable).

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