IBRA plans to issue asset-backed bonds
IBRA plans to issue asset-backed bonds
SEOUL (Dow Jones): The Indonesian Bank Restructuring Agency is preparing to issue its first asset-backed securities in the first quarter of next year, Amir Sambodo, advisor to IBRA's chairman, said on Thursday.
While the details of the issue still have to be finalized, Sambodo noted that IBRA has a total of US$1.5 billion worth of assets to securitize, both in Indonesian rupiah and foreign currencies.
The first issue will most likely be launched on the domestic market, he said, because Indonesia's low sovereign credit rating makes it difficult to tap the international market.
IBRA's upcoming issue will be a Collateralized Debt Obligation because an 'ABS' could be confused with IBRA's petrochemical interests, which are known as ABS, Sambodo said.
In his presentation to delegates at a forum organized by the Korean Asset Management Corporation, Sambodo said IBRA has already spent $15 billion to merge 10 banks and recapitalize 10 other banks, as well as $630 million to recapitalize Bank Bali.
In terms of asset management credit, IBRA has resolved 72 percent of non-performing assets, worth $7.3 billion, for the top 21 debtors.
IBRA, he said, has sold $248 million worth of mortgage and corporate loans, collected $1.6 billion in cash from financial assets, auctioned $120 million worth of non-financial assets and outsourced $1.5 billion of commercial loans.
IBRA's financial asset portfolio is currently worth $31 billion and includes the assets of over 150,000 debtors.
He also said IBRA expects to complete the auction of $410 million worth of loans in coming weeks.
In 2001, IBRA's greatest priority will be to dispose of equity derived from credit restructuring, Sambodo said. The agency will also continue its corporate credit restructuring and loan sales as well as auctioning non-financial assets.
"Indonesia is in a critical phase of economic restructuring and political democratization," changes Sambodo said he is confident it will go through.