(The following statement was released by the rating agency)
Feb 19 - Fitch Ratings has assigned a rating of National Long-Term 'AAA (idn)' and National Short-term rating 'F1 + (idn)' to PT Federal International Finance (FIF). The prospect is Stable. Simultaneously, the continuous bond program 2012 of a maximum of ten (10) trillion dollars awarded National Long-Term rating 'AAA (idn)'. The company has two years to issue bonds under the bond program sustainable.
Fitch has also assigned a rating 'AAA (idn)' and 'F1 + (idn) for stage II 2013 senior bonds to be issued under the FIF continuous bond program, a maximum of 2.5 trillion dollars with a maximum term of three years. The proceeds from the issuance of the bonds will be used to support the business growth of the company.
consideration The ranking
The ratings reflect Fitch's expectation that when necessary FIF will receive strong support from PT Astra International Tbk (AI), which has a nearly 100% ownership of the FIF. It is based on FIF significant contribution to the main business of two-wheeled vehicle AI, As an integral part of the two-wheeler business chain AI. FIF has an important role to provide financing for the purchase of Honda motorcycles manufactured by Astra Honda Motor (AHM), which is a 50-50 joint venture between AI and Honda Motor Company Ltd. ('A' / Stable).
Bonds rated the same as the National Long-Term rating FIF 'AAA' (idn) reflecting Fitch's view that corporate bonds are direct obligations of, not conditional, and does not constitute unsecured subordinated debt.
Factors Fueling Rating
Decrease in ownership or AI support and contribution to the AHM FIF will be able to put pressure on FIF ranks. However, Fitch saw kenungkinan is small in the future, given the strategic importance of the business FIF two-wheeled vehicle AI and AHM. FIF receivables grew to 24 trillion rupiah at end-September 2012 from 15 trillion rupiah at the end of 2008 and FIF has a contribution of 47% of the sales of motorcycles AHM on credit (in the unit) until the third quarter of 2012.
Fitch hopes FIF will still rely on funds from the capital markets and bank lending to support growth in two-wheeler business, as FIF still have a debt to capital ratio is low at 3.6x at the end of September 2012 (2011:3.7 x), which is far at the lower limit set by regulators 10x. FIF will have the support of capital, if needed, from the AI if the internal limit debt to capital ratio has been exceeded.
As the company's 'captive' that focuses on financing a motorcycle with a higher risk, profitability FIF higher than its competitors engaged in automobile financing. The ratio of net income to assets and net income to equity masing0masing are 6% and 31% at end-September 2012.
FIF asset quality is maintained with the NPL ratio by 1% at the end of September 2012 (2011:0.8%). Removal of troubled loans (including recovery) and losses on foreclosed assets remained stable at 4% of the average net receivables at the end of September 2012 and 2011. In Fitch's view, asset quality may decline if economic conditions worsen or fuel prices go up.
(Bangalore Ratings Team, Hotline: +91 80 4135 5898, Bhanu.email@example.com, Group id: BangaloreRatings@thomsonreuters.com, Reuters Messaging: Bhanu.Priya.firstname.lastname@example.org)
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