Fitch: Indonesia sukuk BBB-

Fitch Ratings said it assigned an expected BBB- rating to Indonesia's proposed Perusahaan Penerbit SBSN Indonesia III (PPSI-III) global certificates.

The expected rating is in line with the Republic of Indonesia's long-term foreign-currency issuer default rating of BBB- and stable outlook.

The ratings reflect a view that cash flows supporting payment on the proposed sukuk will constitute direct, unconditional, unsecured and general obligations of the Republic of Indonesia, ranking equally with Indonesia's unsecured and unsubordinated marketable external debt, Fitch said.

The ratings are underpinned by the country's strong economic growth, supported by high investment and savings rates and low and declining public debt ratios, the agency said.

Pressures on the external finances are a credit weakness, resulting in some strain on the credit profile, Fitch said. But these are not yet seen as inconsistent with a BBB- rating, the agency added.

The ratings also consider an expectation that policy will be managed in such a way as to prevent economic overheating, Fitch said.

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