'No immediate plan to raise RI rating'<\/p>\n
SINGAPORE (Dow Jones): U.S.-based ratings agency Standard &
\nPoor's Corp. doesn't expect to upgrade its sovereign debt rating
\nfor Indonesia in the near term, the agency's regional head told
\nDow Jones Newswires Monday.<\/p>\n
Cecile Saavedra, head of Asia Pacific for S&P, said a ratings
\nchange is unlikely to change the country's CCC+ sovereign debt
\nrating for Indonesia \"in the foreseeable future.\"<\/p>\n
The agency is likely to maintain its stable outlook for the
\nnear term despite signs of a recovery in the country's equities
\nmarket and currency, she said.<\/p>\n
Many economists believe - and official data supports - that
\nIndonesia's economy has bottomed out and is slowly turning
\naround.<\/p>\n
Bankers say this has led to a market re-rating of the
\ncountry's sovereign risk. Spreads between Indonesia's dollar-
\ndenominated Yankee bond and comparable U.S. Treasurys for
\ninstance, have rallied enormously, as the perceived political
\nrisk associated with the country has tumbled in the wake of
\npeaceful elections last month.<\/p>\n
This has led to calls for international ratings agencies to
\nfollow market sentiment and upgrade. The agencies argue however
\nthat Indonesia still has substantial bank and corporate
\nrestructuring to go through and say the country doesn't yet merit
\nan upgrade.<\/p>\n
Saavedra said growing concerns over possible loan defaults by
\ncompanies operating power plants in Indonesia aren't likely to
\naffect the country's sovereign rating.<\/p>\n
The government and its power producer PT Perusahaan Listrik
\nNegara (PLN) have said they are seeking to renegotiate contracts
\nwith its main, mostly foreign, power suppliers given PLN's weak
\nfinancial position. This has raised fears of default as PLN isn't
\npaying many of its suppliers for power.<\/p>\n
The power projects are financed to a large extent by export
\ncredit agencies and defaulting to them would create problems for
\nother sovereign lending to Indonesia, from countries such as
\nJapan.<\/p>\n
Asked about China and Taiwan, Saavedra said political risk is
\na factor when considering a rating, but wouldn't say whether the
\nagency is considering a ratings change for the two countries.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/no-immediate-plan-to-raise-ri-rating-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}