BII raises $140 million in securitization deal<\/p>\n
JAKARTA (JP): Publicly listed Bank Internasional Indonesia
\n(BII), a unit of the widely diversified Sinar Mas Group, has
\nraised Rp 364.11 billion (US$140 million) by issuing securitized
\nfuture credit card receivables to international institutional
\ninvestors in the offshore capital market.<\/p>\n
Managing director for securitization at Citicorp International
\nLtd. Eric D. Alsberg said yesterday that receivables were due
\nfrom Visa International Services Association and MasterCard
\nInternational Incorporated.<\/p>\n
\"The deal was priced at 140 basis points over the U.S.
\nTreasury rates in 10 years,\" he said after signing the deal here.<\/p>\n
The deal was arranged by Citicorp International Ltd., a
\nsubsidiary of Citibank.<\/p>\n
He said demand for BII's securitization transaction, the first
\nof its kind in Indonesia, was strong because orders at the issue
\nprice were more than $185 million.<\/p>\n
\"The higher demand reflects the confidence of foreign
\ninstitutional investors in BII and the future of Indonesia's
\ntourism and business travel industries,\" he said.<\/p>\n
He predicted that sectors in Indonesia likely to be
\nsecuritized would include international telephone receivables,
\nmerchant credit card receivables, airline ticket sales, workers
\nremittance flows, agricultural commodities, natural resources and
\nindustrial resources.<\/p>\n
BII president Indra Widjaja said proceeds from the deal would
\nbe used for the bank's expansion program in the country.<\/p>\n
He said housing credit and automobile loans were other BII
\nassets that may be securitized.<\/p>\n
\"We see these sectors as highly promising for securitization
\nin the future,\" he said.<\/p>\n
Though asset-backed securities are still new in Indonesia,
\nmore and more companies will seek to securitize their assets as
\nan alternative financial source to their operations in Indonesia,
\nhe said.<\/p>\n
\"There is increased interest in securitization as a funding
\nalternative in the region,\" he said.<\/p>\n
According to data complied by The Jakarta Post, six Indonesian
\ncompanies have issued asset-backed securities to finance their
\noperations.<\/p>\n
They are Indonesia's largest automaker Astra International
\nwhich issued the securities with a transaction value of $200
\nmillion in August 1996, electricity company PT PLN worth $500
\nmillion in 1996, Citibank Jakarta $50 million in 1996, PT ABS
\nFinance worth $40 million in August 1996, PT Bunas Finance worth
\n$30 million in February 1997 and Bank Bira worth $20 million in
\nFebruary 1997.<\/p>\n
The U.S. investment bank company Salomon Brothers Inc.
\npredicted the transaction value of asset-backed securities in the
\nAsia-Pacific region would increase between $1 billion to $2
\nbillion next year because more companies would seek to use debt
\ninstruments to finance their operations.<\/p>\n
Indra Widjaja said that BII had 230,000 credit card holders as
\nof June, 1997, up from 180,000 in 1996.<\/p>\n
\"That constituted a 10 percent share of the credit card market
\nin Indonesia,\" he said.<\/p>\n
He said BII's total credit card receivables was Rp 300 billion
\na month.<\/p>\n
He said BII, which posted a net profit of Rp 260 billion in
\n1996, recorded a total unaudited net profit of Rp 200 billion in
\nthe first half this year.<\/p>\n
\"That represented a 50 percent increase over the corresponding
\nperiod last year,\" he said. (aly)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bii-raises-140-million-in-securitization-deal-1447893297",
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"sponsor_url": "https:\/\/okusiassociates.com"
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