Danamon bond issue postponed

JAKARTA: Due to high market volatility and an inevitable future rise in Bank Indonesia's benchmark interest rate, Bank Danamon has decided to postpone its plans to issue Rp 2.5 trillion (US$264.55 million) in bonds.

The country's fifth largest lender said in a statement that the delay, approved by underwriters Danareksa Sekuritas, Trimegah Securities and DBS Vickers Securities Indonesia, was so as to allow time for market conditions to improve and had nothing to do with market demand.

"The market showed strong interest during the initial book building process, but some investors are asking for a higher coupon rate," it said. It was unclear when the bond issue will now take place.

The bank had planned to use the proceeds of the bond sale to expand its lending. Danamon is 62 percent controlled by Singapore's Temasek Holdings Pte and Deutsche Bank AG. -- JP