Today’s highlights:
The US and Iran continued technical negotiations despite two consecutive days of military exchanges, with the 60-day negotiation period remaining formally intact — though meaningful progress on key issues including Hormuz shipping, frozen Iranian assets, and Iran’s nuclear program has yet to be achieved. Oil prices steadied after earlier gains as markets reassessed the risk of prolonged disruption, though the durability of the interim ceasefire remains highly uncertain amid mutual accusations of truce violations and Washington’s decision to revoke Iranian oil sales waivers.
From the bond market, FR 56, 37, 90, and 59 are currently the cheapest based on our yield curve model. Last national business day, the dollar index was closed at 100.90 (-0.1%). Rupiah was depreciated by 0.6% at USDIDR at 18,128. The 10yr UST yield decreased by -2.8bps to 4.55% and 10yr INDOGBR decreased by -0.6bps to 7.29% – the spread between the two was at 273bps.
Economy: US and Iran continued technical talks despite renewed military clashes
A US official said technical negotiations between the US and Iran would continue despite two days of military exchanges that tested the fragile ceasefire between the two countries. The talks remained part of a 60-day negotiation period established under the interim peace agreement, although recent US airstrikes, Iranian retaliation against US bases, and Washington’s decision to revoke a waiver allowing Iranian oil sales posed significant challenges to the process. Both sides continued to accuse each other of violating the truce, while discussions had yet to achieve meaningful progress on key issues, including shipping through the Strait of Hormuz, frozen Iranian assets, and Tehran’s nuclear program. Oil prices steadied after earlier gains as markets reassessed the risk of prolonged disruptions to energy flows through the Strait of Hormuz. Source: Bloomberg
Fixed Income: Pefindo affirmed SMIL’s corporate rating amid strong forklift rental business position
Pefindo reaffirmed its idA- rating with a stable outlook on PT Sarana Mitra Luas Tbk (SMIL), valid through July 1, 2027, reflecting its strong market position in forklift rental, strong profit margin, and strong financial profile, constrained by working-capital funding pressure and tight competition. An upgrade could follow sustained business strengthening and revenue/EBITDA growth, while a downgrade could follow weaker operating performance or higher-than-expected debt without stronger business prospects. Pefindo also affirmed its idAAA(cg) rating on SMIL’s fully CGIF-guaranteed Bond I Year 2024. Established in 2006, SMIL operates five forklift rental workshops in Cikarang, majority-owned by the Suhermin family. Source: Pefindo
Fixed Income: Pefindo affirmed IATA’s corporate rating on sizeable mining reserves and low-cost position
Pefindo affirmed its idA- ratings on PT Karya Pacific Energy Tbk (IATA) and its Shelf-Registered Bond I, and idA-(sy) on its Shelf-Registered Sukuk Wakalah I, with a stable outlook through July 1, 2027. The rating reflected sizeable mining reserves, a low-cost position, and Group synergy, constrained by a moderate financial profile and exposure to regulatory, commodity price, and environmental risks. IATA’s IDR149.83bn bond and IDR49.3bn sukuk tranches due October 6, 2026 will be repaid using internal funds. An upgrade could follow enlarged business scale from higher coal production, while a downgrade could follow weaker revenue/EBITDA, higher debt, or falling coal prices. IATA is a coal miner with three mines in South Sumatra, part of Karya Pacific Investama. Source: Pefindo
Fixed Income: Pefindo affirmed WIKA’s ratings at idB, maintained CreditWatch with Negative Implication
Pefindo affirmed PT Wijaya Karya (Persero) Tbk’s (WIKA) ratings and its Shelf-Registered Bonds at idB and Sukuk Mudharabah at idB(sy), for the period July 7 to October 7, 2026. The CreditWatch Negative outlook reflects elevated liquidity risk in meeting near-term maturing obligations amid persistently weak business performance, driven by WIKA’s weak financial and liquidity profile and risks from previous expansion. A further downgrade could follow inability to meet obligations, while the outlook could revert to stable on sustained improvement in performance and timely payments. WIKA is an SOE construction company majority-owned by PT Danantara Asset Management (90.02%). Source: Pefindo
Fixed Income: Pefindo affirmed POLI’s Sustainable Link Bond I/2025 rating on full CGIF guarantee
Pefindo affirmed its idAAA(cg) rating on PT Pollux Hotels Group Tbk’s (POLI) Sustainable Link Bond I/2025, valid through July 1, 2027, fully guaranteed by Credit Guarantee and Investment Facility (CGIF, idAAA/Stable). The rating could be lowered if the guarantor is downgraded or the guarantee is violated. POLI is a Semarang-based property developer established in 2009, majority-owned by Po Sun Kok (56.95%). Source: Pefindo
Fixed Income: Pefindo affirmed Summit Oto Finance’s idAAA rating amid proposed merger with Oto Multiartha
Pefindo affirmed its idAAA rating for PT Summit Oto Finance (SOF) and its Bond I/2025, with a stable outlook through February 1, 2027, in response to the announced merger with PT Oto Multiartha (OTO). SOF will be the surviving entity, with the merger expected effective September 1, 2026, intended to enhance efficiency and strengthen combined scale and capital structure. The rating is driven by very strong support likelihood from Sumitomo Mitsui Banking Corporation (SMBC), SOF’s controlling shareholder, though constrained by moderate asset quality and profitability. A downgrade could follow reduced SMBC support or ownership. SOF is a motorcycle financing company with 284 distribution networks across Indonesia. Source: Pefindo
Fixed Income: Pefindo affirmed OTO’s idAAA rating, to be withdrawn upon merger with Summit Oto Finance
Pefindo affirmed its idAAA rating for PT Oto Multiartha (OTO) and its Shelf Registered Bond I/2023, with a stable outlook through February 1, 2027, in response to the announced merger with PT Summit Oto Finance (SOF). OTO will be dissolved once the merger becomes effective (expected September 1, 2026), with all assets, liabilities, and equity transferred to SOF; the rating will consequently be withdrawn. The rating reflects very strong support likelihood from Sumitomo Mitsui Banking Corporation (SMBC), constrained by intense competition in car financing. OTO is a car financing and cash loan provider with 146 marketing networks and over 5,000 dealer partners. Source: Pefindo
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