Fitch rates new Indonesia debt BBB-

Fitch Ratings said it assigned an expected rating of BBB- to Indonesia's trust certificate issuance program and proposed dollar-denominated sovereign global certificates (sukuk) issued through Perusahaan Penerbit SBSN Indonesia III (PPSI-III) under the program.

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

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

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

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

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 said.

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