Fitch rates Indonesia sukuk BBB

Fitch Ratings said it assigned an expected BBB rating to Indonesia's proposed dollar-denominated sovereign Islamic global certificates (sukuk), which include at least one green tranche.

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

The sukuk will be issued through Perusahaan Penerbit SBSN Indonesia III (PPSI-III), which is also the trustee, Fitch said.

PPSI-III is a legal entity in Indonesia set up solely to issue the Indonesian government's sharia-compliant securities in foreign currencies in the international markets, the agency said.

The issuer is contemplating multiple tranches for the proposed sukuk transaction, Fitch said.

The proceeds from the green sukuk tranche are likely to be used to finance or refinance green projects, the agency said.

The ratings are driven solely by Indonesia's BBB issuer default rating, reflecting a view that a default of these senior unsecured obligations would reflect a default of Indonesia, Fitch said.

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