Moody’s rates Indonesia sukuk Baa3

Moody's Investors Service said it assigned provisional Baa3 senior unsecured debt ratings to the proposed dollar-denominated trust certificates to be issued by the Government of Indonesia (Baa3 positive) through Perusahaan Penerbit SBSN Indonesia III (PPSI III) under its existing trust certificate issuance program, which was recently enlarged to $15 billion from $10 billion previously.

The payment obligations associated with these certificates are direct obligations of the Government of Indonesia.

In Moody's opinion, the payment obligations represented by the securities to be issued by PPSI III are ranked pari passu with other senior, unsecured debt issuances of the Government of Indonesia.

As such, the provisional Baa3 rating to the proposed sukuk issuance is in line with the Government of Indonesia's Baa3 issuer rating given that any direct government obligation whose repayment is handled by the Government of Indonesia receives a rating equivalent to that of the government, the agency explained.

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