Indonesian SOE Ratings Unlikely to Change as Ownership Shifts

Indonesia has established a new sovereign wealth fund, Danantara, to manage several large state-owned enterprises (SOEs) including Pertamina, Perusahaan Listrik Negara (PLN), Mineral Industri Indonesia (MIND), and Telekomunikasi Indonesia (Telkom). The move is not expected to change the Issuer Default Ratings (IDRs) of these companies, which are driven by government support expectations. Danantara’s management approach could influence the Standalone Credit Profiles (SCPs) of these entities, particularly if it requires higher dividend payouts or if the SOEs engage in riskier projects. The strategy may also encourage banks to increase lending to sectors prioritized by the government, such as renewable energy and affordable housing.