BNI raises bond offering to $150m

BNI raises bond offering to $150m

Dow Jones, Singapore

PT Bank Negara Indonesia doubled the size of its bond offering and paid a rate that was at the bottom end of the range it had sought to price the deal at, its lead manager said Friday.

The state-owned Indonesian bank priced $150 million worth of subordinated debt at 99.041 to yield 10.25 percent - the bottom end of the range of its initial price guidance of 10.25 percent to 10.375 percent, J.P. Morgan said.

The bond will pay a coupon of 10 percent, the bank said.

This was the first Indonesian bond offering since the deadly Oct. 12 Bali bombings, which analysts say have dimmed the outlook for Indonesian assets.

But "there's still good investor interest in the right names from Indonesia," said Marc Lewell, head of syndicate at J.P. Morgan in Hong Kong.

BNI had reduced the size of its 10-year subdebt, non-callable for the first five years, to $75 million from the $100 million it had originally planned, after the terrorist attacks on the Indonesian resort island of Bali. In fact, the road shows, which were held in Hong Kong and Singapore late last week, were delayed by about a week following the bombings.

Still, BNI's deal was priced around 60 basis points tighter than state-run PT Bank Mandiri's $125 million subordinated debt issued in late July, J.P. Morgan noted.

While about half of BNI's deal was allocated to investors in Indonesia, 45 percent was placed in the rest of Asia, while 5 percent went to Europe, Lewell said.

"We were able to place 50 percent of the deal outside of Indonesia," said J.P. Morgan's Lewell.

Market observers had expected Indonesian investors to absorb the bulk of the deal amid concerns that international investors would avoid the country's assets after the Bali attacks.

By investor type, some 40 percent of the deal was sold to private banks, about 5 percent asset managers, 2 percent to 3 percent corporates, and the rest banks, said Lewell.

Standard & Poor's Ratings Services had assigned a CCC rating to BNI's subordinated debt.