Bank Tiara gets $46m offshore loan

JAKARTA (JP): Amid the region's currency crisis, publicly listed Bank Tiara Asia, the banking arm of the Ometraco Corp, secured a US$46 million multi-bilateral loan facility with 10 foreign and local banks.

The deal, signed in Bali last week, was arranged by Standard Chartered Bank, Dresdner (Southeast Asia), Sumitomo Bank and Westdeutsche Landesbank.

Six other banks participated in the deal. They were Bank Bumiputra Malaysia, GZB Bank/SGZ Bank, Indover Bank, Banca Commerciale Italiana, Tat Lee Bank and Bank Negara Indonesia 1946.

Standard Chartered said yesterday the offshore loan market had been seriously affected by the volatility of the Indonesian rupiah and just a handful of deals were now being arranged in the markets.

The bank said many foreign banks had shelved plans to raise debt financing for borrowers which were not so well recognized abroad.

"Liquidity is tight and most banks would now hesitate committing to large underwriting positions or raising funds for borrowers which are less than blue-chip," said Chester Dee, director of Syndications and Asset Sales at the Singapore branch of Standard Chartered Bank.

The bank said the facility for Bank Tiara was divided into US$10 million three-year and US$36 million two-year tranches. Both were pegged at 0.80 percent per annum above the London Interbank Offered Rate.

Bank Tiara signed the deals with each participating bank.

Bank Tiara's newly appointed president Herry Wibowo said his bank had no currency trading position except for its clients and therefore it was not affected by the recent currency volatility.

Foreign currency borrowings were fully hedged and the increase in the cost of funding in an environment of high interest rates had caused the bank to increase its lending rates.

The bank reported a 53 percent rise in interim net profit of Rp 26.8 billion (US$9.2 million) for the first semester this year. (rid)