Buana to issue Rp 500b sub debt

Buana to issue Rp 500b sub debt

JAKARTA: PT Bank Buana Indonesia said on Friday it will issue up to Rp 500 billion (US$59 million) in 10-year subordinated debt in early April to support loan expansion in the future.

The mid-sized bank set April 2-6 as the offering period for the bond, which will be sold at par.

It hasn't decided the coupon yet as it is waiting for the rating results from local rating agency Pefindo. Bank Buana is one of several banks that survived the 1997-98 Asian financial crisis without a government bailout.

The bank's net profit in 2003 dropped 12 percent to Rp 221.85 billion from Rp 251.25 billion mainly due to lower income from foreign currency transactions and from securities it held, it said.

Since last year, several banks have issued subordinated debt to reduce reliance on short-term deposits as a source of funds. -- Dow Jones