Fitch rates astra sedaya finance aaa(idn); outlook stable

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(The following statement was released by the rating agency) JAKARTA/TAIPEI/SINGAPORE, May 07 (Fitch) Fitch Ratings has assigned Indonesia-based PT Astra Sedaya Finance (ASF) a National Long-Term rating of 'AAA(idn)' with a Stable Outlook. Rating Action Rationale ASF's rating reflects Fitch's expectation of continued strong support and commitment from its majority shareholder, PT Astra Internasional Tbk (AI). The ratings also take into account ASF's strategic importance to the Astra Group in expanding the latter's car manufacturing and distributor business in Indonesia and the parent's full ownership. As an integral part of AI's car business chain, ASF has an important role in providing direct financing services for AI's car sales. The Stable Outlook reflects Fitch's expectations that AI will continue to support ASF in case of need. Rating Drivers and Sensitivities Any significant decline in AI's ownership and performance or support and ASF contribution to AI would exert downward pressure on its ratings. However, Fitch sees this prospect as remote in the foreseeable future, given ASF's strategic importance to AI's car business. There is no rating upside as the rating is already at the top of the scale. ASF's asset quality remains healthy with low non-performing loans at 0.5% of total net managed receivables at end-2012. In Fitch's view, an economic downturn or fuel price hikes could lead to higher but manageable non-performing loans in 2013. ASF contributed about 30% of AI's car credit sales (in units) at end-2012. Overall ASF's satisfactory underlying profitability with a return on assets of 3.8% at end-2012 (2011: 3.9%), combined with a higher provision cover at 3% of total net managed receivables at end-2012 (2011: 2.7%), should continue to provide reasonable buffer against loan losses in more challenging economic conditions. The parent company in 2011 injected IDR600bn additional capital to support ASF's business growth. ASF's debt to equity (DER) ratio at 5.1x at end-2012 (2011: 4.6x) remained far below the regulatory threshold of 10x. Fitch expects that ASF will continue to tap capital markets and bank loans for funding to support its future car business growth and that ASF will receive capital support, in time of need, from AI if the internal DER threshold of 8x is breached. Contacts: Primary Analyst Julita Wikana Director +62 21 2902 6405 PT Fitch Ratings Indonesia Level 20 Prudential Tower Jl. Jend. Sudirman Kav.79 Jakarta, Indonesia 12910 Secondary Analyst Iwan Wisaksana Director +62 21 2902 6406 Committee Chairperson Jonathan Lee Senior Director +886 2 8175 7601 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.this site Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(idn)' for National ratings in Indonesia. Specific letter grades are not therefore internationally comparable. Additional information is available at this site Applicable criteria, "Global Financial Institutions Rating Criteria", dated 15 August 2012, "Finance and Leasing Companies Ratings Criteria", dated 12 December 2012, "Rating FI Subsidiaries and Holding Companies", dated 10 August 2012, and "National Ratings Criteria", dated 19 January 2011, are available at this site Applicable Criteria and Related Research Global Financial Institutions Rating Criteria here Finance and Leasing Companies Criteria here Rating FI Subsidiaries and Holding Companies here National Ratings Criteria here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW. FITCHRATINGS. COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.