20250902_FIFA_Laporan Informasi dan Fakta Material_31936670_lamp2.pdf

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8/28/25, 4:44 PM Fitch Affirms Federal International Finance's Ratings at 'BBB'/'AAA(idn)'; Outlook Stable

RATING ACTION COMMENTARY

Fitch Affirms Federal International Finance's Ratings at
'BBB'/'AAA(idn)'; Outlook Stable
Thu 28 Aug, 2025 - 5:16 AM ET

Fitch Ratings - Singapore/Jakarta - 28 Aug 2025: Fitch Ratings has affirmed PT Federal
International Finance's (FIF) Long-Term Issuer Default Rating (IDR) at 'BBB' and
Shareholder Support Rating at 'bbb'. Fitch Ratings Indonesia has affirmed the National
Long-Term Rating at 'AAA(idn)' and National Short-Term Rating at 'F1+(idn)'. The Outlook
on the long-term ratings is Stable. The ratings on the company's bond programmes and
issuance have also been affirmed.

'AAA' National Long-Term Ratings denote the highest rating assigned by the agency in its
National Rating scale for that country. This rating is assigned to issuers or obligations with
the lowest expectation of default risk relative to all other issuers or obligations in the same
country or monetary union.

'F1' National Short-Term Ratings indicate the strongest capacity for timely payment of
financial commitments relative to other issuers or obligations in the same country. Under
the agency's National Rating scale, this rating is assigned to the lowest default risk relative
to others in the same country or monetary union. Where the liquidity profile is particularly
strong, a "+" is added to the assigned rating.

KEY RATING DRIVERS

Support-Driven Ratings: FIF's ratings are anchored by Fitch's expectation of extraordinary
support from its sole shareholder, PT Astra International Tbk (AI), if needed. AI is one of
Indonesia's largest conglomerates, holding market leadership in the country's automotive
and heavy equipment sectors, and is 50.1%-owned by Jardine Cycle & Carriage Ltd., a
subsidiary of the Hong Kong-based Jardine Matheson group.

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8/28/25, 4:44 PM                                 Fitch Affirms Federal International Finance's Ratings at 'BBB'/'AAA(idn)'; Outlook Stable

 Core Subsidiary: Our view of shareholder support is based on FIF's integrated role in AI's
 automotive value chain, as the captive financier for Honda motorcycle sales produced by PT
 Astra Honda Motor (AHM). AHM is a 50:50 joint venture between AI and Honda Motor Co.,
 Ltd (A/Stable), with Honda-branded motorcycles commanding the largest market share of
 Indonesia's new two-wheeler sales. FIF also makes a substantial contribution to AI's
 consolidated net profit and is one of the largest subsidiaries in AI's financial services
 segment.


 Reputational Links: The longstanding shareholder relationship and overlapping creditor
 base between FIF and AI establish strong reputational ties between the two companies.
 Fitch believes that a default by FIF would have significant reputational repercussions and
 may affect the lenders' confidence for AI, further incentivising AI to provide extraordinary
 support to FIF if required.


 Close Integration: FIF and AI exhibit close integration in areas such as business strategy,
 financial reporting, funding activities and capital planning. This is reflected in high level of
 referrals from AI's two-wheeler distributors to FIF, regular monitoring and coordination
 meetings between the two companies, and AI's active oversight on FIF's fundraising
 strategies.


 Moderate Standalone Profile: FIF's standalone credit profile does not drive of its ratings,
 but reflects its meaningful market position in Indonesia's finance and leasing sector, steady
 asset quality, stable funding access and adequate profitability. We expect FIF's adequate
 net interest margins on motorcycle financing and cost control support its profitability,
 providing buffer against potential fluctuations in credit costs arising from its relatively risky
 customer base. FIF's established underwriting and risk-management processes also
 mitigate its credit risk and contribute to its consistent financial performance through
 economic cycles.


 FIF's non-performing financing (NPF) ratio was 1.2% in 2024 (2023: 1.0%), significantly
 below the industry average of 2.7%. Its pretax income to average assets ratio remained
 robust at 13.4% in 2024 (2023: 14.3%), well above the industry average of 5.1%. FIF's
 leverage, measured by its debt/tangible equity ratio, was slightly higher than the sector
 average (2.3x), reaching 2.6x at end-2024 (end-2023: 2.3x).

 RATING SENSITIVITIES

 Factors that Could, Individually or Collectively, Lead to Negative Rating
 Action/Downgrade

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8/28/25, 4:44 PM                                 Fitch Affirms Federal International Finance's Ratings at 'BBB'/'AAA(idn)'; Outlook Stable

 FIF's ratings are driven by AI's credit profile, which Fitch believes to be stronger than FIF's
 standalone credit profile. A significant deterioration in AI's credit profile or perceived
 weakening in AI's propensity to support FIF could lead to negative rating action. Potential
 indications may include a material decline in AI's ownership or a significant increase in FIF's
 management independence, although Fitch considers this to be unlikely in light of FIF's role
 in AHM's business and AI's financial services segment as a captive financier.


 The National Short-Term Rating could be downgraded if there were a multi-notch
 downgrade of the National Long-Term Rating to 'A+(idn)'.

 Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

 Fitch may take positive action on FIF's Long-Term IDR and Shareholder Support Rating in
 the event of a significant improvement in AI's credit profile - indicating a strengthened
 ability to support FIF - coupled with an upgrade of Indonesia's (BBB/Stable) Country
 Ceiling.


 There is no upside for FIF's National Ratings because they are already at the highest point
 on our National Rating scale.

 DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS

 FIF's foreign-currency bond programme is rated at the same level as its Long-Term IDR,
 while its rupiah debt programmes and associated bonds are rated on a par with its National
 Long-Term Rating, in line with Fitch's criteria. This is because the instruments represent
 direct and senior obligations of the company and rank equally with all its other senior
 unsecured obligations.

 DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES

 The ratings on FIF's foreign-currency bond programme and local-currency programmes and
 bonds would move in tandem with its Long-Term IDR and National Long-Term Rating,
 respectively.

 SUMMARY OF FINANCIAL ADJUSTMENTS

 FIF's ratings are linked to the credit profile of its shareholder, AI

 REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
 RATING



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