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Moody’s upgrades Indonesia’s rating to Baa2, changes outlook to stable (1)

JAKARTA ( – Moody’s Investors Service (“Moody’s”) has today upgraded the Government of Indonesia’s long-term issuer and senior unsecured ratings to Baa2 from Baa3. The outlook is changed to stable from positive.

The upgrade to Baa2 is underpinned by an increasingly credible and effective policy framework conducive to macroeconomic stability, the rating agency said in a statement.

Together with a build-up of financial buffers, prudent fiscal and monetary policy strengthens Moody’s confidence that the sovereign’s resilience and capacity to respond to shocks has improved.

As a result, Indonesia’s credit metrics are more comparable to sovereigns at the Baa2 level.

Concurrently, Moody’s has upgraded Indonesia’s senior unsecured MTN rating to (P)Baa2 from (P)Baa3.

Moody’s has also upgraded to Baa2 from Baa3 the senior unsecured and backed senior unsecured ratings of the US dollar trust certificates issued by Perusahaan Penerbit SBSN Indonesia III, a special purpose vehicle established by the Government of Indonesia; and the senior unsecured MTN programme of Perusahaan Penerbit SBSN Indonesia III to (P)Baa2 from (P)Baa3.

The payment obligations associated with these certificates are direct obligations of the government, and their ratings automatically reflect changes to Indonesia’s sovereign ratings.

Moody’s has also raised Indonesia’s long-term foreign currency (FC) bond ceiling to A3 from Baa2 and its long-term FC deposit ceiling to Baa2 from Baa3.

In addition, Moody’s has raised the short-term FC bond and deposit ceilings to P-2 from P-3. These ceilings act as a cap on the ratings that can be assigned to the FC obligations of other entities domiciled in the country.

Indonesia’s local currency bond and deposit ceilings remain unchanged at A1. (*)


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