PEFINDO Credit Rating Indonesia - Rating Definitions

Rating Definitions & Outlook

Rating Release

Rating Rationale

Rating Announcement

BOND/MTN Rating

Corporate (GO) Rating

Commercial Paper

Rating Methodology

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Rating Process

Rating Requirements

Rating Definitions

Corporate Governance Scoring
& Asset-Backed Securities

Information Services

PEFINDO's rating serves issuers, insurers, counterparties, intermediaries and investors in the Indonesian financial markets by providing both Debt Specific Ratings which apply to specific debt instruments, and Company Ratings which apply to companies or obligors. Indonesian obligors include all active borrowers, guarantors, insurers and other providers of credit enhancement domiciled in Indonesia, as well as any foreign obligor active in the Indonesian financial markets. PEFINDO ratings are characterized by the use of the "id" prefix to underline that the ratings are assigned within an Indonesian context.

A PEFINDO rating is not a recommendation to purchase, sell, or hold a specific debt security issued by a company, as it does not comment on market price or suitability for a particular investor. Ratings are based on current information furnished by the obligors or obtained by PEFINDO from other sources deemed reliable. PEFINDO does not perform an audit in connection with any rating, and may, on occasion, rely on unaudited financial information. Credit Ratings may be changed, suspended, or withdrawn as a result of material changes in a company's debt servicing capacity.

Company Rating

_idAAA		An obligor rated _idAAA has a superior capacity to meet its long-term financial commitments relative to that of other Indonesian obligors.
_idAA		An obligor rated _idAA differs from the highest rated obligors only to a small degree, and has a very strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors
_idA		An obligor rated _idA indicates that, the obligor has a strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. However, the obligor is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated obligors.
_idBBB		An obligor rated_idBBB has an adequate capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.
_idBB		An obligor rated _idBB has a somewhat weak capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. The obligor faces ongoing uncertainties or exposure to adverse business, financial or economic conditions which could result in an inadequate capacity on the part of the obligor to meet its financial commitments.
_idB		An obligor rated _idB has a weak capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. Adverse business, financial or economic conditions will likely impair the obligor’s capacity to meet its financial commitments.
_idCCC		An obligor rated _idCCC is currently vulnerable, and is dependent upon favorable business and financial conditions to meet its financial commitments.
_idSD		An obligor rated _idSD ("Selective Default") has failed to pay one or more of its financial obligations, rated or unrated, when it came due. An "SD" rating is assigned when PEFINDO believes that the obligor has selectively defaulted on a specific issue or class of obligations but will continue to make timely payments on its other obligations.
_idD		The obligor is in default to meet its long-term financial commitments. The obligor’s has no capacity to meet its’s short-term financial commitments.

The ratings from _idAA to _idB may be modified by the addition of a plus (+) or minus (-) sign to show relative strength within the rating category.


Long-term and Medium-term Debt Paper Rating

_idAAA		A debt security rated _idAAA has the highest rating assigned by PEFINDO. The obligor’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian obligors, is superior.
_idAA		A debt security rated _idAA differs from the highest rated debt only to a small degree. The obligor’s capacity to meet its long-term financial commitments on the debt security, relative to other Indonesian obligors, is very strong.
_idA		Debt security rated _idA indicates that the obligor’s capacity to meet its long-term financial commitments ont the debt security, relative to other Indonesian obligors, is strong, however, the debt security is somewhat more susceptible to adverse effects of changes in circumstances and economic conditions than higher-rated debt.
_idBBB		Debt security rated _idBBB denotes adequate protection parameters relative to other Indonesian debt securities. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity on the part of the obligor to its long-term financial commitments on the debt security.
_idBB		Debt security rated _idBB denotes somewhat weak protection parameters relative to other Indonesian debt securities. The obligor’s capacity to meet its long-term financial commitments on the debt security is susceptible to major ongoing uncertainties or exposure to adverse business, financial, or economic conditions.
_idB		Debt security rated _idB denotes weak protection parameters relative to other Indonesian debt securities. Although the obligor currently still has the capacity to meet its long-term financial commitments on the debt security, any adverse business, financial, or economic conditions would likely impair the capacity or willingness of the obligor to meet its long-term financial commitments on the debt security.
_idCCC		Debt security rated _idCCC is currently vulnerable to non-payment, and is dependent upon favorable business and financial conditions for the obligor to meet its long-term financial commitments on the debt security.
_idSD		Debt security rated _idSD ("Selective Default") will be assigned to an obligor which has failed to pay one or more of its financial obligations, rated or unrated, when it came due. An "SD" rating is assigned when PEFINDO believes that the obligor has selectively defaulted on a specific issue or class of obligations but will continue to make timely payments on its other obligations.
_idD		Debt security is rated _idD when it is in payment default, or default of a rated obligation occurs automatically upon the first occurance of non-payment of the obligation. An exception is warranted when an interest payment missed on the due date is made within the grace period, or whenever such a non-payment is subject to a bona fide commercial dispute.

The ratings from_idAA to _idB may be modified by the addition of a plus (+) or minus (-) sign to show relative strength within the rating category.


Short-term Debt Paper Rating

_idA1		A short-term debt security rated _idA1 has the highest rating category assigned by PEFINDO. The obligor’s capacity to meet its short-term commitments on the debt security, relative to other Indonesian obligors, is superior.
_idA2		A short-term debt rated _idA2 is slightly more susceptible to adverse changes in circumstances and economic conditions than the highest rated debt. The obligor’s capacity to meet its short-term financila commitments on the debt security, relative to other Indonesian obligors, is strong.
_idA3		A short-term debt security rated _idA3 denotes above average protection parameters relative to other short-term Indonesian debt securities.
_idA4		A short-term debt security rated _idA4 denotes adequate protection parameters. It is, however, more vulnerable to adveerse effects of changes in circumstances than debt securities carrying higher rating categories.
_idB		A short-term debt security rated _idB denotes significant vulnerability to adverse business, financial, or economic conditions regarding timely payment of interest of repayment of principal, relative to other short-term Indonesian debt securities.
_idC		A short-term debt security rated _idC denotes doubtfulcapacity for payment.
_idSD		A short-term debt security rated _idSD("Selective Default") will be assigned to an obligor which has failed to pay one or more of its financial obligations, rated or unrated, when it came due. An "SD" rating is assigned when PEFINDO believes that the obligor has selectively defaulted on a specific issue or class of obligations but will continue to make timely payments on its other obligations.
_idD		A short-term debt security rated _idD denotes payment default.

Financial Insurer Strength Rating:

_idAAA		An insurer rated _idAAA has extremely strong financial security characteristics relative to other insurers in Indonesia. idAAA is the highest Insurer Financial Strength Rating assigned by PEFINDO.
_idAA		An insurer rated _idAA has very strong financial security characteristics relative to other insurers in Indonesia, differing only slightly from those rated higher.
_idA		An insurer rated _idA has strong financial security characteristics relative to other insurers in Indonesia, but is somewhat more likely to be affected by adverse business conditions than are insurers with higher ratings.
_idBBB		An insurer rated _idBBB has good financial security characteristics relative to other insurers in Indonesia, but is more likely to be affected by adverse business conditions than are higher rated insurers.
_idBB		An insurer rated _idBB has marginal financial security characteristics relative to other insurers in Indonesia. Positive attributes exist, but adverse business conditions could lead to insufficient ability to meet financial commitments.
_idB		An insurer rated _idB has weak financial security characteristics relative to other insurers in Indonesia. Adverse business conditions will likely impair its ability to meet financial commitments.
_idCCC		An insurer rated _idCCC has vulnerable financial security characteristics, and is dependent on favorable business conditions to meet financial commitments.
_idR		An insurer rated _idR is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to non-financial actions such as market conduct violations.

The ratings from_idAA to _idB may be modified by the addition of a plus (+) or minus (-) sign to show relative strength within the rating category.

	Rating Outlook

	*Positive*		Ratings may be raised.
	*Negative*		Ratings may be lowered.
	*Stable*		Ratings are not likely to change.
	*Developing*		Ratings may be raised or lowered.

A PEFINDO Rating Outlook assesses the potential direction of an obligor’s long-term credit rating over the intermediate to longer term. In determining a Rating Outlook, consideration is given to any changes in the economic and/or fundamental business conditions. A Rating Outlook is not necessarily a precursor of a rating change or future RatingAlert.

RatingAlert is conducted if events occurred that materially could have positive, negative or developing impacts to the performances of an obligor’s long-term credit rating.

For any inquiries, please contact Pinky at (6221) 521-0077 or Fax at (6221) 521-0078 or by e-mail corpcom@pefindo.com

This document is for information only and for the use of the recipient. The ratings have been arrived by virtue of information supplied by applicants of which the accuracy and completeness are the sole responsibility of the applicants. These ratings do not constitute a recommendation to acquire, dispose of, or hold on to any debt instrument issued by virtue of, or related with, these ratings so that PEFINDO shall not liable for any damages/losses arising from, or related to, the utilization of these ratings does not advise nor give any option that any document issued by virtue of, or related to, these ratings are enforceable in accordance with its terms.