BNI (BBNI) to Bolster Core Capital via AT-1 Bonds
PT Bank Negara Indonesia (Persero) Tbk (BBNI) plans to issue Additional Tier-1 Perpetual Non-Cumulative Capital Securities (New AT-1) offshore. In a disclosure, BNI explained that the plan refers to the provisions of Regulation S of the US Securities Act of 1933.
BNI Corporate Secretary Okki Rushartomo stated that this initiative is aimed at strengthening the capital ratio and structure to support business expansion. Additionally, the red-plate bank also plans to conduct a buyback, or repurchase, of the Additional Tier 1 Perpetual Non-Cumulative Capital Securities issued in 2021 (Existing AT-1) through a tender offer mechanism.
“To strengthen the capital ratio and structure to support business expansion, the Company plans to issue New AT-1 and simultaneously execute a Tender Offer to holders of Existing AT-1 to repurchase Existing AT-1 in cash, as part of optimising the capital structure,” said Okki in the disclosure quoted on Wednesday (15/4/2026).
The participation period for the Tender Offer runs from 14 April 2026 to 22 April 2026, with settlement scheduled for 24 April 2026. The outcomes of the New AT-1 issuance and the Tender Offer for Existing AT-1 will depend on market conditions, among other factors.
In connection with this plan, on 14 April 2026, BNI announced the intention to issue New AT-1 and the plan to repurchase Existing AT-1 instruments from holders via Tender Offer, including through the Bloomberg platform. On the same date, the Company also conducted a series of investor calls in the Asia, Europe, Middle East, and Africa (EMEA) regions.
“The issuance of New AT-1 and the execution of the Tender Offer for Existing AT-1 are expected to have a positive impact on the Company’s capital structure and support the development of the Company’s business activities,” emphasised Okki.
Furthermore, he explained that the New AT-1 issuance will take place outside Indonesia and will not be offered to Indonesian investors, whether individuals, institutions, or other legal entities. Consequently, this plan is not subject to the provisions of OJK Regulation No. 30/POJK.04/2019 on the Issuance of Debt Securities and/or Sukuk without a Public Offering (POJK 30/2019).
The New AT-1 will be listed on the Singapore Exchange and not on the Indonesia Stock Exchange (BEI).
However, BNI did not provide further details on the value of the New AT-1 to be issued.
For context, BNI issued Additional Tier-1 Capital Bonds in 2021 amounting to US600million, orapproximatelyRp8.6trillion(assuminganexchangerateofRp14, 299perUS at the time). These securities, released with an interest rate of 4.3% per year, refer to Regulation S under the US Securities Act and are registered on the Singapore Stock Exchange. BNI was the first bank in Indonesia to issue this Additional Tier 1 capital instrument.
Quoting CNBC, AT-1 bonds are bank bonds considered a form of junior debt that is relatively risky, thus offering higher returns and often purchased by institutional investors.
These bonds are sometimes also called contingent convertibles or “CoCos.” The name derives from their ability to be converted into equity or written off, rendering their value zero, but only in certain scenarios.
This is often linked to the issuing bank’s capital ratio. If the capital ratio falls below a certain level, for instance, it serves as an emergency plan for investors to convert their holdings into equity.