Bank Mandiri to begin debt roadshow July 18

Bank Mandiri to begin debt roadshow July 18

Dow Jones Singapore

Unperturbed by the market's recent volatility, Indonesia's state-owned Bank Mandiri is going ahead with its plan for a dollar-denominated bond, and will kick off its roadshow in Singapore on July 18, a source close to the deal told Dow Jones Newswires Tuesday.

The roadshow will continue in Hong Kong on July 19, before moving on to London on July 22, and possibly the U.S. thereafter, the source said.

Pricing of the bond will likely take place on July 25 or 26, he added.

Indonesia's largest state-owned bank plans to issue around US$150 million in lower tier-two debt, with a maturity of 10 years, non-callable for the first five years, the source said, although he added that the size hasn't been determined yet.

The planned bond issue comes at a time when demand for high- yield debt in the region has flagged, with Asia's dollar- denominated bond market expected to remain volatile in the next few months on fears of more corporate accounting scandals and jitters surrounding Brazil's presidential election in October.

Despite heightened risk aversion in the market, Bank Mandiri shouldn't have problems selling its paper since it is a relatively small issue, the source said.

"There's a dedicated Asian base that's looking for high-yield assets," the source said.

Private banks showed strong participation in recent bond issues by Indonesia's biggest instant noodle maker PT Indofood Sukses Makmur and mobile telephone operator PT Telekomunikasi Selular Indonesia, also known as Telkomsel.

UBS Warburg is the lead manager for Bank Mandiri's planned bond issue.

This is the second time in seven months that the bank is tapping the global debt market. Bank Mandiri sold $125 million of five-year floating rate notes in December last year.