Moody’s: Indonesia bonds Baa3

Moody’s Investors Service said it assigned a provisional rating of Baa3 to the proposed yen-denominated bonds to be issued by the Government of Indonesia.

The issuance is a private placement, Moody’s said.

The outlook is stable.

Indonesia’s Baa3 government bond rating is supported by narrow fiscal deficits, low public indebtedness, large size of the Indonesian economy and its comparatively healthy GDP growth prospects, Moody’s said.

Credit challenges include institutional weaknesses, reflected in Indonesia’s scores on the World Bank’s governance indicators, the agency said.

The government’s budget deficits have generally been contained at levels lower than those of similarly rated peers and this has steadily reduced the government’s debt burden, Moody’s said.

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