20250729_HIFI_Laporan Hasil Pemeringkatan_31928257_lamp2.pdf

7/28/25, 12:59 PM                                   Fitch Places Hino Finance Indonesia's 'AA+(idn)' Rating on Rating Watch Evolving

 Our assessment of Hino Motors' capacity to support HFI also takes into consideration
 support from the ultimate shareholder, TMC.


 Parent Merger Progressing: The recent announcement on a final merger plan between
 Hino Motors and MFTBC provides greater clarity on the shape and timeline of the
 integration deal. A new holding company will be established, which will own both entities
 entirely. TMC and Daimler Truck AG - the current controlling shareholder of MFTBC - will
 each own 25% in the new holding company, which will also be listed on the Tokyo Stock
 Exchange. The new structure is expected to take effect from April 2026.


 Parent Recapitalisation Mitigates Remediation Costs: The RWE also reflects potential
 improvement in the prospects of Hino Motors. The company has announced plans for
 additional capital from Toyota through an issue of shares and plant sale that should improve
 Hino Motors' capital and leverage position, and help to offset the costs of a financial
 settlement to resolve past certification issues. These developments could bolster Hino
 Motors' financial profile and ability to support its Indonesian financing subsidiary.


 However, parent support links with Toyota post-merger remain less certain, and continue to
 pose downside risks to support prospects for HFI. Our assessment of Hino Motors' capacity
 to support HFI also takes into consideration ongoing support from the ultimate
 shareholder, TMC.


 Joint Shareholding Structure: HFI is jointly owned by Hino Motors (40% shareholding),
 local conglomerate PT Indomobil Multi Jasa Tbk (40%), and Summit Global Auto
 Management B.V., a subsidiary of Sumitomo Corporation (20%). This ownership structure
 mirrors that of Hino Motors' distribution entity in Indonesia, highlighting the partners'
 expertise and cooperation in the local distribution as well as financing businesses. We
 regard Hino Motors as the primary source of support for HFI, given HFI's role as a captive
 financier and the shared brand.


 Adequate Standalone Profile: HFI's rating is not based directly on its standalone profile,
 which we consider weaker than its support-driven rating. Our assessment of the standalone
 profile reflects HFI's considerable market presence in its niche of commercial vehicle
 financing; better-than-average asset quality which offsets its modest profitability;
 moderate leverage; and adequate funding access, which is supported by ongoing ordinary
 support from its shareholders.


 Risk Management Underpins Asset Quality: We expect HFI to maintain relatively
 conservative underwriting standards, which should support acceptable asset quality
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7/28/25, 12:59 PM                                   Fitch Places Hino Finance Indonesia's 'AA+(idn)' Rating on Rating Watch Evolving

 through credit cycles. The non-performing financing ratio of 0.2% in 2024 (2023: 0.1%) was
 significantly lower than the industry average of 2.7%, and charge-offs were also minimal.
 HFI's debt/tangible equity ratio has increased to 3.0x (2023: 2.6x), higher than the industry
 average of 2.3x. However, we expect capitalisation to be supported by stable internal
 capital generation and slowing growth.

 RATING SENSITIVITIES

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

 Fitch plans to resolve the Rating Watch Evolving (RWE) upon greater clarity of Hino
 Motors' credit profile and support prospects after the completion of the merger process,
 which may take more than six months. Weaker strategic links between Toyota and Hino
 Motors could have a negative effect on Hino Motors' credit profile and its ability to support
 HFI, with the potential to result in negative rating action on HFI. A deterioration in Hino
 Motors' financial profile after the merger could also affect HFI's rating.


 Any weakening relationship between Hino Motors and HFI could lead to negative rating
 action. This could result from a material decline in HFI's role and contribution to Hino
 Motors' overall business - due possibly to a strategic shift within the Hino group, reduced
 Hino Motors ownership in HFI, or declining integration between the two entities.


 HFI's support-driven rating is also dependent on Fitch remaining able to assess Hino
 Motors' credit profile after its restructuring. In the event Fitch is no longer able to reliably
 assess the parent's credit profile and capacity to provide support, HFI's rating may be
 driven solely by its standalone credit profile, which may be several notches below its
 current rating.

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

 An improvement in Hino Motors' standalone credit profile could drive positive rating action
 on HFI, provided that we believe the strategic links between TMC and Hino Motors, and
 between Hino Motors and HFI, remain broadly intact.


 A closer perceived relationship and stronger integration between Hino Motors and HFI
 could also lead to positive rating action on HFI. This may occur if Hino Motors obtains a
 significantly higher shareholding in HFI.


 We may remove the RWE and affirm HFI's rating if the restructuring plan is cancelled.


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7/28/25, 12:59 PM                                   Fitch Places Hino Finance Indonesia's 'AA+(idn)' Rating on Rating Watch Evolving

 DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS

 HFI's rupiah bond programme and issuance are rated on a par with its National Long-Term
 Rating in accordance 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 obligations.
 The RWE on the bonds reflects the RWE on HFI's National Long-Term Rating.

 DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES

 HFI's local-currency programme and instrument ratings will move in tandem with its
 National Long-Term Rating.

 REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
 RATING

 The principal sources of information used in the analysis are described in the Applicable
 Criteria.

 PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

 HFI's ratings are based on Fitch's expectation of extraordinary support from its
 shareholder, Hino Motors, in times of need.


                                                      RATING ACTIONS



      ENTITY / DEBT                       RATING                                                             PRIOR 




      PT Hino Finance                                                                                          AA+(idn)
                                              Natl LT       AA+(idn)
      Indonesia

                                              Rating Watch Revision



          senior unsecured                                                                                     AA+(idn)
                                              Natl LT       AA+(idn)


                                              Rating Watch Revision



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7/28/25, 12:59 PM                                   Fitch Places Hino Finance Indonesia's 'AA+(idn)' Rating on Rating Watch Evolving

 VIEW ADDITIONAL RATING DETAILS



 Additional information is available on www.fitchratings.com

 PARTICIPATION STATUS

 The rated entity (and/or its agents) or, in the case of structured finance, one or more of the
 transaction parties participated in the rating process except that the following issuer(s), if
 any, did not participate in the rating process, or provide additional information, beyond the
 issuer’s available public disclosure.

 APPLICABLE CRITERIA

 National Scale Rating Criteria (pub. 23 Dec 2020)

 Non-Bank Financial Institutions Rating Criteria (pub. 01 Feb 2025) (including rating
 assumption sensitivity)



 ADDITIONAL DISCLOSURES

 Solicitation Status
 Endorsement Policy

 ENDORSEMENT STATUS

 PT Hino Finance Indonesia                                                                                  -



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 https://www.fitchratings.com/understandingcreditratings. In addition, the following
 https://www.fitchratings.com/rating-definitions-document details Fitch's rating definitions
 for each rating s


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 SOLICITATION STATUS

 The ratings above were solicited and assigned or maintained by Fitch at the request of the
 rated entity/issuer or a related third party. Any exceptions follow below.


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7/28/25, 12:59 PM                                   Fitch Places Hino Finance Indonesia's 'AA+(idn)' Rating on Rating Watch Evolving

 Fitch's solicitation status policy can be found at www.fitchratings.com/ethics.
 ENDORSEMENT POLICY

 Fitch’s international credit ratings produced outside the EU or the UK, as the case may be,
 are endorsed for use by regulated entities within the EU or the UK, respectively, for
 regulatory purposes, pursuant to the terms of the EU CRA Regulation or the UK Credit
 Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019, as the case may be. Fitch’s
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 page on Fitch’s website. The endorsement status of international credit ratings is provided
 within the entity summary page for each rated entity and in the transaction detail pages for
 structured finance transactions on the Fitch website. These disclosures are updated on a
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