Fitch rates Indonesia bond BBB-

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

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

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

The agency said it has given no consideration to the sukuk's underlying assets.

PPSI-III is a legal entity in Indonesia set up solely for the purpose of issuing sharia-compliant securities of the government of Indonesia in foreign currencies in the international markets, Fitch said.

The sukuk rating is driven solely by Indonesia's issuer default rating and senior unsecured rating of BBB- due to the sukuk's structure and documentation, the agency explained.

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