Pefindo to get assistance from Standard & Poor's
Pefindo to get assistance from Standard & Poor's
JAKARTA (JP): PT Pefindo, Indonesia's only rating company,
signed an agreement yesterday with Standard & Poor's Ratings
Services, of the United States, to cooperate on analytical and
business development.
Hendrik J. Kranenburg, the executive vice president of
Standard & Poor's said that his agency would share its rating
expertise, knowledge of the capital market and analytical
criteria with Pefindo.
"Standard & Poor's will also provide assistance on marketing,
publishing and other credit rating operations," Kranenburg said
to journalists about the terms of the agreement.
Pefindo's president, Farid Harianto, said the Indonesian
rating agency will, in return, provide Standard & Poor's with
business development assistance in Indonesia and share its
considerable knowledge of the local debt market and debt issues.
Farid described the cooperation agreement as a breakthrough
for Pefindo, which had sought Standard & Poor's technical
assistance since the early stages of its operations.
"It is an honor to receive technical assistance from a leading
rating agency such as Standard & Poor's," he said while admitting
that it took Pefindo more than nine months to convince the
American agency that it should forge links with Pefindo.
Pefindo, established in late 1993 as the first Indonesian
rating agency to facilitate the development of the fixed income
market, is the only rating firm allowed to assign ratings on
local issuers of commercial papers.
The rating agency, which provides objective, independent,
credit opinions on the local market, had rated 80 companies as of
June 30.
Kranenburg said that the cooperation agreement was made after
the American firm learned of the independence of Pefindo's rating
activities and to follow Standard & Poor's long tradition of
working with local rating agencies in both developed and emerging
markets.
"For example, Standard & Poor's activities in France, Sweden
and Spain all began with partnerships with local rating firms.
Moreover, Standard & Poor's has established affiliations with
local rating firms in Argentina, Chile and India within the past
year and is exploring other opportunities," Kranenburg noted.
He said however that the partnership with Pefindo is currently
limited to only technical assistance and business development
cooperation.
Like Kranenburg, Farid said the cooperation agreement does not
yet include an option of allowing Standard & Poor's to acquire a
portion of Pefindo's shares.
"We'd better leave the option open. Some time in the future,
we may invite Standard & Poor's into equity participation," Farid
said.
Standard & Poor's, one of the world's leading rating firms,
has 1,300 employees at its 16 offices and maintains ratings on
more than US$5 trillion in debts of corporate, public sector and
financial institutions in 60 countries.
The agency, which publishes its risk opinions and financial
market commentaries through electronic and print media to
worldwide financial market participants, has been rating bonds
since 1916.(hen)