S&P raises three firms' debt ratings
The Jakarta Post, Jakarta
Global credit rating agency Standard & Poor's (S&P) has raised its debt ratings for three Indonesian companies -- PT HM Sampoerna, PT Bank Mandiri and PT Bank Danamon -- citing a reduced risk in their ability to service their obligations.
Sampoerna, Indonesia's second largest cigarette producer, had its debt ratings raised by two levels to "BB+" from a previous "BB-", S&P said in a statement released on Friday.
The rating outlook for Sampoerna, which was acquired by U.S. tobacco giant Altria Group for US$5 billion earlier this year, is now "stable", meaning that the rating is unlikely to change in the short run.
Both PT Bank Mandiri, the country's largest lender by assets, and PT Bank Danamon, Indonesia's fifth largest bank, had their ratings raised by a level to "BB-" from "B+". The outlook on their ratings were also considered "stable".
S&P regards credit ratings of "BBB-" or above as investment grade. "BB+" is a level under the grade, while "BB-" is three levels below.
Indonesia's rating for long-term, foreign-currency debts is "B+", or four levels lower than the investment grade, while its long-term, local-currency credit rating is "BB".
S&P has, since 2002, been raising Indonesia's ratings amid economic improvements, but in September changed the country's rating outlook to "stable" from "positive", citing concern over the government's inability to stem the rupiah's recent slump due to soaring global oil prices.
S&P said it had raised the three companies' credit ratings based on the consideration that Indonesia, despite being under recent political and economic stresses, is less likely to restrict access to the foreign exchange the firms need to service their debts.
Companies considered well-insulated from direct and indirect sovereign risk may even achieve a foreign-currency rating that exceeds the sovereign foreign-currency rating, S&P said.
Besides the three Indonesian firms, S&P has also raised its ratings for India's Infosys Technologies Ltd. and Tata Steel Ltd., the Philippines' Globe Telecom, PLDT, Universal Robina Corp. and San Miguel Corp. and Thailand's Advanced Info Services.