BNI plans to double dollar bonds issue

Rendi A. Witular, The Jakarta Post, Jakarta

State-owned Bank Negara Indonesia (BNI), the country's second largest bank in terms of assets, plans to double the size of its U.S. dollar-denominated bond offering amid strong demand from investors, according to one key official.

Managing director of PT BNI Securities Noor Hassim told The Jakarta Post on Wednesday the publicly listed bank was now planning to issue up to US$100 million, compared to an earlier plan of $50 million.

But he said that the new plan had yet to receive approval from Bank Indonesia.

In addition to the dollar-denominated bonds, BNI is also planning to issue rupiah bonds worth Rp 1 trillion ($117 million) next month.

Proceeds from the bonds will be used to improve the bank's capital base and boost its lending capacity.

BNI Securities is one of the underwriters of the bond offerings, to be made from June 16 to June 18. The bonds will be listed on the Surabaya Stock Exchange on June 27.

During a feasibility study that started on May 13 and to be ended on May 28, it was found that the planned bond issue would be 1.5 times oversubscribed, Noor said.

BNI said the indicative fixed rate of the rupiah bonds would be in the range of 12.75 percent to 13.50 percent with a maturity period of eight years, while the coupon range for the dollar bonds would be between 7.87 percent and 8.37 percent with a maturity period of 10 years.

The rupiah bonds have received an A- rating from local rating agency PT Pefindo, while the U.S. dollar bonds received a BBB+ rating, both considered "stable".

Meanwhile, BNI president Saefuddin Hasan said that the management would propose an asset revaluation measure at the upcoming shareholders meeting on June 19 as part of efforts to resolve several financial issues dating back to the beginning of the economic crisis.

He declined to provide further details of the plan.

Despite problems with non-performing loans dating back to 1997, BNI, however, had decided to allocate some Rp 1.25 trillion or half of its 2002 net profit as dividend payments -- the first since 1997.