Fitch: Finnet Indonesia A(idn)

Fitch Ratings said it assigned a national long-term rating of A(idn) to PT Finnet Indonesia with a stable outlook.

Finnet provides payment services for PT Telekomunikasi Indonesia (Telkom) and PT Telekomunikasi Seluler Tbk (Telkomsel). Finnet is indirectly owned by Telkom (60%) and Bank Indonesia’s pension fund.

The A rating denotes expectations of low default risk relative to other issuers or obligations in the same country, Fitch said.

However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher-rated category, the agency said.

The rating also reflects linkage to the Telkom group with about 80% of its cash flows derived from business with its 60% shareholders, Telkom and Telkomsel, Fitch said.

The agency also said it expects the linkage will remain strong over the medium term because of Telkom’s strategy to retain the payment-service provider within the group.

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