Fitch rates KB Bukopin bonds AAA, AA

Fitch Ratings said published the national long-term ratings on PT Bank KB Bukopin, Tbk.'s planned Indonesian rupiah-denominated senior unsecured and subordinated bond tranches of bonds.

The bank plans to sell senior unsecured bonds of up to Rp 1 trillion with a maturity of up to five years to be issued under the first tranche of the program with an AAA(idn) rating.

“AAA national long-term ratings denote the highest rating assigned by the agency in its national rating scale for that country. This rating is assigned to issuers or obligations with the lowest expectation of default risk relative to all other issuers or obligations in the same country or monetary union,” Fitch said in a press release.

KB Bukopin also plans to sell subordinated bonds of up to Rp 1 trillion with a maturity of up to seven years to be issued under the first tranche of the program with an AA(idn).

“KB Bukopin's proposed Basel III-compliant subordinated bond program and first tranche issuance from the program are rated two notches below its national long-term rating. Both notches are for loss severity, reflecting the bond's subordination and our view of poor recovery prospects compared with senior unsecured obligations,” Fitch said.

The proceeds will be used mainly to strengthen the bank's funding structure.

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