Fitch Ratings-Jakarta-24 October 2017: Fitch Ratings Indonesia has assigned PT Maybank Indonesia Finance's (MIF, AA+(idn)/Stable) proposed rupiah senior unsecured bond tranche IV 2017 a National Long-Term Rating of 'AA+(idn)'.

Up to IDR1.2 trillion of bonds will be issued under MIF's bond programme, and they will have a maturity of up to five years. Proceeds from the issue will be used to support the company's business growth.

'AA' National Ratings denote expectations of low default risk relative to other issuers or obligations in the same country. However, changes in circumstances or economic conditions may affect the capacity for timely repayment to a greater degree than is the case for financial commitments denoted by a higher rated category.

KEY RATING DRIVERS
The bonds are rated at the same level as MIF's National Long-Term Rating in accordance with Fitch criteria.

The National Ratings of MIF reflect Fitch's expectation of a strong probability of extraordinary support from parent PT Bank Maybank Indonesia Tbk (Maybank Indonesia; BBB/AAA(idn)/Stable) in times of need, and take into account MIF's strategic importance to the parent in supporting the bank's business expansion in Indonesia's fast-growing consumer financing market. Maybank Indonesia's support is manifested in full ownership of MIF, name sharing, operational integration and the provision of funding. The ratings of Maybank Indonesia are in turn driven by strong support from its parent, Malayan Banking Berhad (Maybank; A-/Stable).

RATING SENSITIVITIES
Any changes in MIF's National Long-Term Rating would affect the issue ratings.

Any significant decline in ownership by or perceived weakening of support from Maybank Indonesia would exert downward pressure on the ratings on MIF, including the possibility of multi-notch downgrades. However, Fitch sees this prospect as remote in the foreseeable future, given the finance subsidiary's importance to the parent's consumer businesses. A significant sustained weakening of MIF's contributions to the parent leading to a reassessment of the importance of the business would also exert downward pressure on the ratings.

Rating upside could arise if Fitch were to perceive MIF as a core subsidiary of Maybank Indonesia. This would likely result in an equalisation of MIF's ratings with the parent's National Rating. This could occur if there was further evidence of stronger operational integration between Maybank Indonesia and the subsidiary, and a higher contribution from MIF to the parent's assets and income on a sustainable basis.