PNM’s Sukuk Mudharabah IV Year 2020 assigned at “idA+(sy)”, outlook maintained at “negative”

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1. Press Release October 27 , 2020 PT Permodalan Nasional Madani (Persero) Analysts: Handhayu Kusumowinahyu / Danan Dito Phone/Fax/E-mail: (62-21) 7278 2380 / 7278 2370 / handhayu.kusumowinahyu@pefindo.co.id / danan.dito@pefindo.co.id CREDIT PROFILE Corporate Rating FINANCIAL HIGHLIGHTS idA+/Negative Rated Issues Sukuk Mudharabah IV/2020 (new) Sukuk Mudharabah III/2019 Shelf Reg. Bond III/2019 Sukuk Mudharabah II/2018 MTN XIX/2018 MTN XVIII/2018 MTN XVII/2018 Sukuk Mudharabah I/2017 Shelf Reg. Bond II/2017 Shelf Reg. Bond I/2016 idA+(sy) idA+(sy) idA+ idA+(sy) idA+ idA+ idA+ idA+(sy) idA+ idA+ Rating Period August 19, 2020 – August 1, 2021 Rating History MAY 2020 OCT 2019 MAY 2019 JAN 2019 DEC 2018 APR 2017 SEP 2016 SEP 2015 idA+/Negative idA+/Stable idA/Stable As of/for the year ended Total assets [IDR bn] Net receivables [IDR bn] Net service assets [IDR bn] Total equity [IDR bn] Net interest revenue [IDR bn] Net income [IDR bn] Cost to income [%] Operating profit margin [%] ROAA [%] Non-performing loan ratio [%]*** Reserves/net service assets [%] Equity/net service assets [%] Total debt/equity [x] Short-term liquidity ratio [%]* USD exchange rate [USD/IDR] Jun-2020 Dec-2019 Dec-2018 (Unaudited) (Audited) (Audited) 25,064.2 17,123.2 17,592.8 2,930.1 1,643.7 121.6 **94.3 **1.2 ****1.0 1.6 2.7 16.7 6.8 320.6 14,302 25,924.0 19,040.9 19,326.8 2,864.5 3,329.0 973.2 **83.6 **7.1 4.4 1.3 1.5 14.8 7.3 334.0 13,901 18,082.3 13,394.1 13,471.2 1,893.6 2,150.2 66.0 94.4 3.0 0.4 1.4 0.6 14.1 7.8 517.3 14,481 Dec-2017 (Audited) 11,393.3 7,609.5 7,664.1 1,815.0 1,368.2 35.4 94.6 3.1 0.4 2.4 0.7 23.7 4.8 260.5 13,548 *Adjusted figures, excluding installment reserve fund and other minor items **Grants are classified as other operating income ***Adjusted figures, as regulated under POJK No.16/POJK.05/2019 ****Annualized The above ratios have been computed based on information from the company and published accounts. Where applicable, some items have been reclassified according to PEFINDO’s definitions. idA/Stable idA/Stable idA/Stable idA/Stable idA/Stable PNM’s Sukuk Mudharabah IV Year 2020 assigned at “idA+(sy)”, outlook maintained at “negative” PEFINDO has affirmed the ratings of PT Permodalan Nasional Madani (Persero) (PNM) and its outstanding Shelf Registration Bond I/2016, Shelf Registration Bond II/2017, Shelf Registration Bond III/2019, Medium-Term Notes (MTN) XVII/2018, MTN XVIII/2018 Series A, and MTN XIX/2018 at “idA+”. PEFINDO has also affirmed its “idA+(sy)” rating for its Sukuk Mudharabah I/2017, Sukuk Mudharabah II/2018 and Sukuk Mudharabah III/2019. PEFINDO has also assigned its “idA+(sy)” rating to PNM’s Sukuk Mudharabah IV Year 2020 of a maximum of IDR2 trillion. The outlook for the corporate rating remains “negative”, reflecting PEFINDO’s concern over the significant impact of the COVID-19 pandemic on its financing portfolio. We are of the view that the household sector is one of the most significantly affected, resulting in declining business volume, while a high majority of PNM’s debtors are non-fixed income earners from the low income segments (Mekaar program). With its business model relying on face-to-face contact and mass gatherings, it may face significant challenges in maintaining its new financing disbursement and collection activities, with some areas still implementing large-scale local restrictions (PSBB) and hampering collectors’ activities. Although PSBB has eased in some areas, which resulted PNM to be able to disburse its new financings and collect its receivables, PEFINDO views that this condition still challenged by uncertainties of COVID-19 spread. This may still result in potential deterioration in PNM’s financial indicators, particularly its profitability profile. We acknowledge its efforts to manage its liquidity position through new debt issuance and potential support from other state-owned enterprises, by continuing its grant scheme similar to last year. PEFINDO will continue to closely monitor the impact of COVID-19 on its business and financial indicators to determine its overall credit profile. An obligor rated idA has a strong capacity to meet its long-term financial commitments relative to that of other Indonesian obligors. However, the obligor is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than higher-rated obligors. The Plus (+) sign indicates that the rating is relatively strong within the respective rating category. The suffix (sy) means the rating mandates compliance with Islamic principles. The corporate rating reflects PNM’s strong support from the Indonesian government, strong business position, and strong liquidity and financial flexibility. The rating is constrained by its weak asset quality and high operating expense. The rating may be lowered if PNM’s quality of collections declines significantly, leading to a weaker assessment of its business risk profile since new bookings may not recover immediately due to COVID-19, as well as its liquidity and profitability profiles. PEFINDO may revise the outlook to “stable” if COVID-19 significantly subsides, or if it secures the necessary financing and funding to maintain a manageable overall financial performance. PNM is a financial institution that provides loans and technical assistance to MSMEs and cooperatives. As of June 2020, it had 62 branches, 626 micro capital service units (ULAMM) units, and 2,310 Mekaar offices focused on ultra-micro businesses across Indonesia, providing products and services to more than 6.2 million active clients. It is 100% owned by the Indonesian government. http://www.pefindo.com October 2020
2. Press Release October 27 , 2020 DISCLAIMER The rating contained in this report or publication is the opinion of PT Pemeringkat Efek Indonesia (PEFINDO) given based on the rating result on the date the rating was made. The rating is a forward-looking opinion regarding the rated party’s capability to meet its financial obligations fully and on time, based on assumptions made at the time of rating. The rating is not a recommendation for investors to make investment decisions (whether the decision is to buy, sell, or hold any debt securities based on or related to the rating or other investment decisions) and/or an opinion on the fairness value of debt securities and/or the value of the entity assigned a rating by PEFINDO. All the data and information needed in the rating process are obtained from the party requesting the rating, which are considered reliable in conveying the accuracy and correctness of the data and information, as well as from other sources deemed reliable. PEFINDO does not conduct audits, due diligence, or independent verifications of every information and data received and used as basis in the rating process. PEFINDO does not take any responsibility for the truth, completeness, timeliness, and accuracy of the information and data referred to. The accuracy and correctness of the information and data are fully the responsibility of the parties providing them. PEFINDO and every of its member of the Board of Directors, Commissioners, Shareholders and Employees are not responsible to any party for losses, costs and expenses suffered or that arise as a result of the use of the contents and/or information in this rating report or publication, either directly or indirectly. PEFINDO generally receives fees for its rating services from parties who request the ratings, and PEFINDO discloses its rating fees prior to the rating assignment. PEFINDO has a commitment in the form of policies and procedures to maintain objectivity, integrity, and independence in the rating process. PEFINDO also has a “Code of Conduct” to avoid conflicts of interest in the rating process. Ratings may change in the future due to events that were not anticipated at the time they were first assigned. PEFINDO has the right to withdraw ratings if the data and information received are determined to be inadequate and/or the rated company does not fulfill its obligations to PEFINDO. For ratings that received approval for publication from the rated party, PEFINDO has the right to publish the ratings and analysis in its reports or publication, and publish the results of the review of the published ratings, both periodically and specifically in case there are material facts or important events that could affect the previous ratings. Reproduction of the contents of this publication, in full or in part, requires written approval from PEFINDO. PEFINDO is not responsible for publications by other parties of contents related to the ratings given by PEFINDO. http://www.pefindo.com October 2020