Fitch Ratings Indonesia has revised the Outlook on the National Long-Term Rating of PT JACCS Mitra Pinasthika Mustika Finance Indonesia (JACCS MPMF) to Stable from Negative.

The National Long-Term Rating has been affirmed at 'AA(idn)'. A full list of ratings is below.

The action mirrors the Outlook revision on the Long-Term Issuer Default Ratings of JACCS MPMF's ultimate parent, Mitsubishi UFJ Financial Group, Inc. (MUFG, A-/Stable/a-), to Stable from Negative. This was driven by the affirmation of MUFG's Support Rating Floor (SRF) at 'A-' and the Fitch's expectation that it will remain at least at that level while Japan's sovereign rating (A/Negative) is in the 'A' rating category. For details, see 'Fitch Revises Outlook on MUFG Group and Affiliates to Stable, Affirms Ratings', published 24 September 2020, at https://www.fitchratings.com/site/pr/10136841.

'AA' National Long-Term Ratings denote expectations of a very low level of default risk relative to other issuers or obligations in the same country or monetary union. The default risk inherent differs only slightly from that of the country's highest rated issuers or obligations.

'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

Key rating drivers for JACCS MPMF can be found in the rating action commentary published 13 August 2020, 'Fitch Revises Outlook on Indonesia's JACCS MPMF to Negative; Affirms Ratings', at https://www.fitchratings.com/site/pr/10132674. There have been no material changes to the rating drivers other than Fitch's view on the ability of JACCS MPMF's parent, JACCS Co. Ltd. (JACCS), and ultimate parent to provide support to the entity, indicated by the revision of the Outlook on the ultimate parent, MUFG, to Stable.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Any negative rating action on MUFG or deterioration in JACCS's credit profile, which Fitch sees as better than that of its subsidiary, is likely to result in similar action on JACCS MPMF's National Long-Term Rating. Any change in assumptions pointing to a deterioration in the Japan sovereign's ability or propensity to provide timely support to MUFG, leading to negative action on its Support Rating and Support Rating Floor, together with a downgrade of MUFG's Viability Rating, could weaken MUFG's Long-Term Issuer Default Ratings as detailed in its latest rating action commentary.

Fitch may also downgrade JACCS MPMF's ratings if we perceive that JACCS's or MUFG's motivation to support the entity has weakened, such as due to a significant reduction in the parent's stake or a perceived failure to meet the parent's objectives. A multiple-notch downgrade is possible under these scenarios.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Greater synergies and integration between JACCS MPMF and its parent could lead to an upgrade of the National Long-Term Rating. This may be reflected in an increased contribution from JACCS MPMF to its parent's business and financial objectives, or from closer alignment of the parent's and subsidiary's operations, although Fitch does not expect any significant shifts in these factors in the short term.

An increased stake by JACCS in JACCS MPMF or stronger integration between JACCS MPMF and JACCS's other overseas operations, along with an increased contribution from JACCS's international businesses in aggregate, could also strengthen the support assessment for JACCS MPMF.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579]

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

JACCS MPMF's rating reflects Fitch's expectation of extraordinary support from majority shareholder JACCS and ultimate parent MUFG, if needed.

RATING ACTIONS

ENTITY/DEBT	RATING		PRIOR
PT JACCS Mitra Pinasthika Mustika Finance Indonesia	Natl LT	AA(idn) 	Affirmed		AA(idn)
Natl ST	F1+(idn) 	Affirmed		F1+(idn)

senior unsecured

Natl LT	AA(idn) 	Affirmed		AA(idn)

VIEW ADDITIONAL RATING DETAILS

Additional information is available on www.fitchratings.com

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