'No immediate plan to raise RI rating'

'No immediate plan to raise RI rating'

SINGAPORE (Dow Jones): U.S.-based ratings agency Standard &
Poor's Corp. doesn't expect to upgrade its sovereign debt rating
for Indonesia in the near term, the agency's regional head told
Dow Jones Newswires Monday.

Cecile Saavedra, head of Asia Pacific for S&P, said a ratings
change is unlikely to change the country's CCC+ sovereign debt
rating for Indonesia "in the foreseeable future."

The agency is likely to maintain its stable outlook for the
near term despite signs of a recovery in the country's equities
market and currency, she said.

Many economists believe - and official data supports - that
Indonesia's economy has bottomed out and is slowly turning
around.

Bankers say this has led to a market re-rating of the
country's sovereign risk. Spreads between Indonesia's dollar-
denominated Yankee bond and comparable U.S. Treasurys for
instance, have rallied enormously, as the perceived political
risk associated with the country has tumbled in the wake of
peaceful elections last month.

This has led to calls for international ratings agencies to
follow market sentiment and upgrade. The agencies argue however
that Indonesia still has substantial bank and corporate
restructuring to go through and say the country doesn't yet merit
an upgrade.

Saavedra said growing concerns over possible loan defaults by
companies operating power plants in Indonesia aren't likely to
affect the country's sovereign rating.

The government and its power producer PT Perusahaan Listrik
Negara (PLN) have said they are seeking to renegotiate contracts
with its main, mostly foreign, power suppliers given PLN's weak
financial position. This has raised fears of default as PLN isn't
paying many of its suppliers for power.

The power projects are financed to a large extent by export
credit agencies and defaulting to them would create problems for
other sovereign lending to Indonesia, from countries such as
Japan.

Asked about China and Taiwan, Saavedra said political risk is
a factor when considering a rating, but wouldn't say whether the
agency is considering a ratings change for the two countries.