Fitch: Finnet notes A(idn)

Fitch Ratings said it published a rating on PT Finnet Indonesia’s medium-term notes of A(idn).

The Rp. 200 billion notes will mature in 2022 and pay a coupon of 11%.

Finnet provides payment services for PT Telekomunikasi Indonesia Tbk. (Telkom) and PT Telekomunikasi Seluler Tbk. (Telkomsel). Finnet is indirectly owned by Telkom with 60% ownership and Bank Indonesia’s pension fund with 40% ownership, Fitch said.

The notes are rated at the same level as Finnet’s rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, the agency said.

The rating reflects the company’s linkage to the Telkom group with about 80% of its cash flows derived from the business, Fitch said.

The agency 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.

Finnet also benefits from Telkomsel’s strong market position in the Indonesian mobile telecommunications market and the high growth potential for telecommunications services stemming from the country’s youthful population and growing middle-income segment, Fitch said.

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