PEFINDO: PT Indonesia Infrastructure Finance rated “idAAA”, outlook stable

(October 5, 2021)--PEFINDO has affirmed its “idAAA” ratings for PT Indonesia Infrastructure Finance (IIF), its outstanding Bond I/2016 Series C and Shelf Registered Bond I/2019. The outlook for the corporate credit rating is “stable”.

An obligor rated idAAA has the highest rating assigned by PEFINDO. Its capacity to meet its long-term financial commitments, relative to those of other Indonesian obligors, is superior.

The corporate rating reflects IIF’s very strong support from its shareholders, strong presence in infrastructure financing, very strong= liquidity and financial flexibility, and strong capitalization profile. The rating is constrained by the concentrated financing profile and limited number of feasible infrastructure projects.

The rating could be lowered if there is a material reduction in support from its Parent, which may result from a significant deterioration in IIF’s business and financial profiles.

PEFINDO is of the view that the COVID-19 pandemic will have a manageable impact on the infrastructure financing industry, considering infrastructure is critical to support economic activities in Indonesia. This is also supported by the direction of the government placing infrastructure as one of the top priority sectors. We expect COVID-19 to have a manageable impact on IIF’s credit profile, considering its very strong support from shareholders and strict underwriting standards that follow international best practices. In addition, its financing portfolio is mostly disbursed to toll roads, electricity, water treatment, and telecommunications, which in our view are basic infrastructures with very long periods of use despite facing downward trends amid the pandemic. We are also of the view that its strong underwriting policy and tight monitoring activities will reduce the impact of a potential shock on its business or financial profile.

IIF was established on January 15, 2010, as a private non-bank financial institution focused on investing in commercially feasible infrastructure projects. It provides long-term, fund-based products such as senior loans, mezzanine finance, and equity participations, in addition to non-fund-based products such as guarantees and fee-based services. It had 101 employees and one office as of June 30, 2021. Its shareholders are PT Sarana Multi Infrastruktur (Persero) (SMI, rated idAAA/stable, 30.00%), International Finance Corporation (IFC, AAA/stable by S&P, 19.99%), Asian Development Bank (ADB, AAA/stable by S&P, 19.99%), Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG, 15.12%), and Sumitomo Mitsui Banking Corporation (SMBC, A/stable by S&P, 14.90%). (ends)