Moody's rates Bank Lippo debt Ba3

Moody's Investors Service said it assigned a first-time Ba3 issuer default rating, Ba3 subordinated debt rating, B2 long- and Not-Prime short-term foreign-currency deposit ratings and a D- bank financial strength rating to Indonesia-based PT Bank Lippo Tbk.

The outlook is stable.

The agency said the ratings are underpinned by the bright prospects for the bank's franchise under its new shareholder, Malaysia-based Khazanah Nasional Bhd., which has an A3 senior unsecured domestic-currency rating. The ratings also are supported by the bank's competitive advantage as the second-largest payment bank in the system and its modest financial fundamentals.

However, the ratings also consider the bank's lack of scale, Moody's said. While it is the 10th largest domestic bank, it is still relatively small in a system that is consolidating and where competition is rising.

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