BPS given PBBB grade for payment capability<\/p>\n
JAKARTA (JP): PT Pefindo, Indonesia's first credit rating
\nagency, has awarded a PBBB+ grade for the 25-year bonds of the
\npublicly listed Bank Papan Sejahtera (BPS)<\/p>\n
The bonds, the seven debt instruments issued by BPS, are the
\nfirst debt instruments that have been rated by Pefindo since its
\nestablishment in December, last year.<\/p>\n
Pefindo said in a statement made available here yesterday that
\nthe triple B rating indicates that the capability of the bank to
\npay both interest and debt principals is adequate but that
\nchanges in the economy and the financial performance of the bank
\ncould pose higher risks.<\/p>\n
The bonds worth Rp 250 billion (US$116 million) issued by BPS
\noffer half-yearly coupons carrying a fixed interest rate of 16
\npercent for the first six month and a floating rate of 1.5
\npercentage points above the average interest rates offered by
\nfour major state and two private banks for the remaining period.<\/p>\n
BPS, partly owned by the government, formerly operated as a
\nnon-bank financial institution. It changed its status into a
\ncommercial bank last year to comply with the new Banking Law.<\/p>\n
The triple B is one of Pefindo's ratings which also include
\nPAAA, PAA, PA, PBB, PB, PC and PD.<\/p>\n
The triple A is given to the least risky securities
\ninstruments whereby the capability of the issuing firm in paying
\nboth the interest and debt principle is very high. The change in
\nthe economy, business and the financial situations of the company
\nwill pose no impact on the investment risk.<\/p>\n
The double A grade (PAA) shows the strong capability of the
\nissuing company to pay both interest and loan installments. The
\nchange in the economy, business and the financial performance of
\nthe company may affect the investment risk but the impact will be
\nsmall.<\/p>\n
The single A grade (PA) indicates the strong capability of the
\ncompany to fulfill the interest and loan repayment but the change
\nin the economic situation and the company's business performance
\ncould affect the investment risk.<\/p>\n
The double B rating (PBB) is given to securities which carry a
\npossible risk. The capability of paying the interest and debts is
\nthere but it could easily be affected by the change in the
\neconomy and the business performance of the company.<\/p>\n
The single B rating (PB) indicates that a debt instrument
\ncarries risk and the capability to pay the debts and interests is
\nweak and could easily be affected by the change in the economy
\nand the business performance of the issuing firm.<\/p>\n
The single C rating (PC) is placed on speculative debt
\ninstrument, which poses high default risk.<\/p>\n
The single D, the lowest grade, is put on the defaulted
\nbonds.(hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bps-given-pbbb-grade-for-payment-capability-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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