Tuesday, September 8, 2009

ICBC Indonesia plans to issues subdebt US$25 million

PT Industrial & Commercial Bank Of China (ICBC) Indonesia has plans to issue subdebt US$25 million to boost the capital adequacy ratio (CAR). ICBC is more aggressive to focus on retail and corporation market.
In November 2007, ICBC officially announced its acquisition of Bank Halim and made it into Bank ICBC Indonesia.
ICBC has even committed to become Bank ICBC Indonesia which serves as their business center in Asia Pacific. ICBC provided large amount of capital so as to get the total bank asset returns whose headquarter was formerly located in Surabaya.
The subdebt here serves as an alternative for bank to boost up the CAR. Half of the bonds issuance proceeds will be allotted to second tier so the CAR of a bank could be bolstered.
The sub debt has the equal rights (paripasu) with all the existing and the would-be sub debts.
But the bonds have junior claim if compared to the deposit obligation claim and other claims owned by bank, except there is obligation of certain terms and conditions with the same or junior claim as the sub debt.

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