Methodology

The primary basis of the valuation performed by PHEI uses a "mark-to-market" approach, in which transaction data, consisting of bid-ask and traded price, which occurs in the market for a particular bond series, or another bond series that is considered equivalent to the bond series, becomes the primary reference and data source in the fair market price valuation and determination process. PHEI observes all transaction data and bond transaction reporting in the primary and secondary markets.

In the event of unavailability of transaction data (no transaction) or insufficient data for the valuation and pricing process, PHEI uses the valuation process methodology and Yield Curve estimation.

The valuation model used by PHEI is described as follows:

Metodologi

Proses Valuasi

Securities Criteria

This policy is made as a standard and reference for PHEI in carrying out its daily operational activities related to the criteria for the securities being evaluated.

The Securities being evaluated have the following criteria :

	a.	Government Bonds and Sukuk
		- Tradeable - IDR and USD denomination - Listed in Depository and Settlement Institution
	b.	Corporate Bonds and Sukuk
		- Tradeable - IDR denomination - Officially rated and published by the Securities Rating Agency - Listed in Depository and Settlement Institution

Usage of EBUS Ratings in PHEI

The policy for using EBUS ratings at PHEI is as follows:

	1.	PHEI does not have the authority to determine the quality of the rating results issued by each Securities Rating Agency (LPE), so PHEI will use the rating results from each LPE equally, and has no preference in using the rating results from a particular LPE.
	2.	If an EBUS is rated by 2 (two) Securities rating agencies, then the rating used is the lowest rating issued between the two agencies. For example, XYZ Bonds received ratings of A+ and AA-, then the rating that will be used as a basis for assessing the HPW EBUS is the lowest rating, namely A+.
	3.	If a securities is rated by more than 2 (two) Securities rating agencies, then the rating used is the most common rating or the middle rating issued by each of these agencies. For example, XYZ Bonds received ratings of A+, A+, and AA-, then the rating that will be used as a basis for assessing HPW EBUS is the most common rating, namely A+. However, if the EBUS gets a rating of A+, AA-, and AA, then the rating that will be used as a basis for making an assessment is the rating in the middle, namely AA-.