BRI receives $480m subscriptions

BRI receives $480m subscriptions

JAKARTA: Bank Rakyat Indonesia on Thursday priced its US$150 million international subordinated bond at a yield-to-maturity of 7.78 percent, a source close to the deal said.

The source told Dow Jones Newswires that the state-owned bank received a total of $480 million in subscriptions for the bond.

UBS AG is the lead underwriter.

Moody's Investors Service has assigned a B3 rating to the bond, reflecting the "subordinated status of the notes, strong government support for the bank, as well as BRI's unique and profitable franchise."

The subordinated bond is callable in 2008 before its tenor ends in 2013.

The bank, which has the most extensive network of bank branches in Indonesia, will use the proceeds to expand its capital base.

Besides the dollar-denominated bond, BRI is also preparing to issue Rp 1 trillion ($117 million) in bonds. That is expected after the bank has completed an initial public offering of shares slated for October.

The government plans to sell 30 percent of its 100 percent ownership in BRI to raise Rp 2.6 trillion to reduce the state budget deficit this year. -- Dow Jones