S&P rates Indonesia notes BB+

Standard & Poor's said it assigned a BB+ long-term foreign-currency rating to benchmark-size global sukuk trust certificates issued by Perusahaan Penerbit SBSN Indonesia III (PPSI-III) as part of its expanded $5 billion sukuk trust certificate program.

PPSI-III is a fully owned special purpose vehicle of the Republic of Indonesia, established solely for the program, S&P said.

This issue is rated on par with the sovereign's other commercial financial obligations, the agency said.

This is based on the government's undertaking that trust certificates issued under the program will be treated as direct, unconditional, unsecured and general obligations of Indonesia, S&P said.

These obligations will rank equal in right of payment with all other unsecured and unsubordinated external indebtedness of the sovereign, the agency said.

The sovereign credit ratings on Indonesia reflect the economy's low per capita income, a relatively weak policy environment and rising external leverage from a moderate level, S&P said.

These rating constraints are weighed against the country's well-entrenched cautious fiscal management and resultant modest general government debt and interest burden, which make for a favorable debt profile, the agency said.

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