Fri, 09 Mar 2007
From: The Jakarta Post
By Urip Hudiono, The Jakarta Post, Jakarta
Global rating agency Moody's Investors Service is to expand its services in Indonesia to meet increasing rating needs resulting from the country's growing capital markets.

It is currently in the process of rating seven more Indonesian companies -- mostly operating in the financial sector -- through its local unit, PT Moody's Indonesia, which it established after recently acquiring Kasnic Credit Rating Indonesia.

"There will be a lot of demand for loans in the real sector, many of which will be financed through bond issues, as well as bank loans," Moody's Indonesia president Minon Almasyhur said in a media briefing Wednesday. "We see this as an opportunity to further expand our rating services."

Moody's also sees recent efforts to develop the local bond market -- such as plans to issue more varieties of debt instruments, including sukuk (sharia bonds) and local government bonds -- as providing a further potential boost for the rating business.

Minon said that Moody's planned to rate the overall performance of companies themselves in terms of finances and business prospects, as well as their debt issues.

"One time that company ratings are needed is during acquisitions so that an investor can acquire an objective view of the company," she said.

"There is also a need for the rating of insurance companies so that policy holders can be assured of their insurance cover."

Minon also referred to plans to require consumer finance companies to be rated before taking out loans from non-bank financial institutions as giving rise to further opportunities for Moody's.

Moody's most recently rated the locally based Bank Victoria, giving the lender's senior bonds and subordinate bonds an A3.id and Baa2.id, respectively, both on a stable outlook. Moody's in Indonesia uses a national rating scale that combines its global rating methods with local considerations, such as forex rates, and the political and macroeconomic situations.

Meanwhile, Indonesia's sovereign rating outlook was recently upgraded to positive from stable, with the country's long-term foreign currency bonds rated Ba3 and long-term issuer B1.

Moody's competitors include other global rating agencies such as Standard and Poor's and Fitch.



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