Mandiri to issue bonds in November

Bank Mandiri, the nation's largest bank in terms of assets, is waiting for approval from the central bank to issue global bonds worth some US$300 million in the form of medium-term notes (MTNs).

The bank's corporate secretary, Ekoputro Adijayanto, announced on Monday that the MTNs, which were expected to be issued in November, would be used to refinance the bank's maturing dollar- denominated bonds amounting to $400 million.

"We are still in a due diligence process for issuing the MTNs, as well as waiting for the green light from the central bank. We expect to issue the bonds in November after the procedure has been completed," said Ekoputro.

The MTNs will mature in three to five years, he added.

The state bank has appointed Credit Suisse First Boston as lead underwriter for the issue.

In the first six months of this year, the bank suffered a sharp decline in net profit resulting from an increase in nonperforming loans (NPL).

The bank's net profit dropped by 80 percent to Rp 620 billion (US$60.49 million) in the first half this year, from over Rp 3 trillion in the corresponding period last year.

The bank's gross NPLs rose to 24.6 percent as of June 2005 from 8.2 percent as of June 2004, while its net NPLs rose to 15.4 percent from 1.8 percent. -- JP