S&P raises three firms' debt ratings

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.