BRI may increase bond sale to $120 million in july<\/p>\n
Bloomberg, Jakarta<\/p>\n
PT Bank Rakyat Indonesia (BRI), which the government plans to
\nsell in the second half of this year, may boost a planned July
\ndollar-bond sale by one fifth to US$120 million to bolster its
\ncapital and fund new lending.<\/p>\n
BRI will name a foreign bank to manage the sale next
\nweek, Finance Director Wayan Alit Antara said. UBS Warburg, which
\nis arranging BRI's initial share sale, Deutsche Bank AG, J.P.
\nMorgan Chase & Co, HSBC Holdings Plc and Credit Suisse First
\nBoston Inc. are competing for the mandate, he said.<\/p>\n
The dollar bonds will mature in between seven and 10 years.<\/p>\n
\"The $100 million is the minimum amount we are looking at,\"
\nWayan said. \"We are thinking of raising it to $120 million.\"<\/p>\n
BRI joins rival Indonesian companies in seeking to capitalize
\non investor appetite for high-yield debt amid a decline in global
\ninterest rates. PT Bank Negara Indonesia, the country's largest
\npublicly traded lender, will raise $50 million in 10-year dollar
\nbonds in June to boost funds for lending.<\/p>\n
PT Bank Mandiri, Indonesia's largest lender by assets, last
\nmonth sold $300 million of five-year bonds, 50 percent more than
\nearlier planned in the nation's largest sale of U.S. debt since
\nthe Asian financial crisis of 1997. UBS Warburg and Credit Suisse
\nFirst Boston helped arrange the sale.<\/p>\n
Proceeds from the sale will also help BRI improve its capital
\nadequacy ratio -- a measure of its financial strength. The ratio
\nstood at 12.62 percent at the end of 2002, more than the 8
\npercent minimum required by the central bank. Earlier this month,
\nthe bank said it was seeking to sell $100 million of bonds.<\/p>\n
In September, BRI plans to sell another Rp 1 trillion ($120
\nmillion) of 10-year bonds, Wayan said. Local banks, including PT
\nAndalan Artha Advisindo, PT Trimegah Securities and PT Bahana
\nSecurities have expressed interest in managing the sale, and an
\nadviser will be selected by the end of May.<\/p>\n
\"We need more time to sell rupiah bonds and so we expect to
\nsell it in September,\" Wayan said. President Director Rudjito
\nearlier said the bank plans to sell the bonds in June.<\/p>\n
UBS Warburg was hired by the Indonesian government to manage
\nthe initial share sale of BRI later this year. It may sell
\nas much as 30 percent of the bank in an initial share sale,
\nbankers involved said in April.<\/p>\n
The bank received Rp 20.4 trillion of government bonds in July
\n2000, as part of a bailout of the country's financial system
\nafter the rupiah collapsed in 1997-98.<\/p>\n
With 10-year U.S. Treasuries yielding about 3.32 percent,
\nIndonesian debt is drawing investors looking for higher returns,
\nencouraged by the rupiah's 7.6 percent appreciation this year.<\/p>\n
Indonesian dollar bonds are up 5.58 percent this year,
\naccording to indexes compiled by HSBC Treasury & Capital Markets
\nfor eight Asian nations. Philippines debt is the best performing,
\nup 9.46 percent.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bri-may-increase-bond-sale-to-120-million-in-july-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}