S&P rates Indonesia notes BB+

Standard & Poor’s said it assigned a BB+ long-term issue rating to benchmark-size euro-denominated global notes that Indonesia proposes to issue as part of its $25 billion global medium-term notes program.

The notes will constitute the direct, unconditional, unsubordinated and unsecured obligations of Indonesia.

The sovereign credit ratings on Indonesia reflect the economy’s low per capita income, developing structural and institutional foundations, weak policy environment and rising external leverage, S&P said.

These rating constraints are weighed against the country’s cautious and well-entrenched fiscal management, modest general government debt and interest burden and moderately strong economic growth, the agency said.

The stable outlook on the sovereign rating reflects Indonesia’s moderately weak governance and effectiveness of government policies, low GDP per capita and external vulnerability, which are balanced against a conservative fiscal policy, favorable debt trajectory and the country’s moderately strong growth prospects.

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