Indonesia’s BNI plans $500 million perpetual bonds, $806 million rights issue By Reuters

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© Reuters. A woman holds Indonesian rupiah banknotes at a Bank Negara Indonesia (BNI) mobile bank in Jakarta July 15, 2013. REUTERS/Beawiharta/Files

JAKARTA (Reuters) – Bank Negara Indonesia (BNI) is planning to raise funds by selling at least $500 million in perpetual bonds this year and launching an 11.7 trillion rupiah ($805.79 million) rights issue next year, a senior government official said on Thursday.

The state-run lender is eyeing a bond issuance in the third quarter with an estimated coupon rate of 4% to 5% per year and a maturity of up to 5 1/2 years, according to a document presented by Kartika Wirjoatmodjo, a deputy minister at the State-Owned Enterprises Ministry (SOEs), at a parliament hearing.

The lender also plans to launch a rights issuance in the first half of 2022 with the government aiming to maintain its majority stake of between 55% to 57% by injecting 7 trillion rupiah, Kartika told the lawmakers.

The proceeds will be used to support the bank’s capital.

Kartika said the lender’s assets and loan growth for the past few years had not been supported by adequate profits. Its capital adequacy ratio (CAR) has dropped as low as 16%.

“As a systemic bank, we hope (BNI’s) CAR can return to around 19%,” Kartika said.

BNI’s profits dropped 43.9% year-on-year in the January-March period to 2.4 trillion rupiah.

Kartika said another state lender, Bank Tabungan Negara, also planned to raise capital from a rights issue of up to 5 trillion rupiah. He did not give a timeline.

($1 = 14,520.0000 rupiah)

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