Tuesday, November 10, 2009

Bank Mandiri deal US$100 million loan

PT Bank Mandiri Tbk finalized bilateral loan in foreign exchange denomination worth US$100 million from three world finance institutions. The measure is taken along with the offer of subdebt of 7 years tenure worth IDR3 trillion.
Treasury and International Director of Bank Mandiri Thomas Arifin said the company has option to increase foreign exchange funding, bilateral and subdebt.
The bilateral loan is currently possible due to the lower cost of fund.
"Next week we will announce (creditors name) as the process is still underway. The value is about that much (US$100 million). We adjust it to the demand for foreign exchange credit," he said last week.
The loan facility here is to balance the structure of long term funding despite the current sluggish demand for foreign exchange credit given that there will be soaring expectation of export financing next year.
On the global economy recession in quarter III/2008, Bank Mandiri LDR hit 111 percent with credit value worth IDR36.6 trillion. This is due to the depreciation of rupiah against US dollar hitting IDR12,000 per US dollar.
Thomas said next year the foreign exchange credit will increase along with the global economy recovery with the growing export and import.
"There is offer from some financing institutions with various tenure ranging from 5 to 7 years."
The subdebt coupon ranges from 10.75 to 12 percent or 100-225 basis points above the FR0030 series coupon as from 9.75 percent last week.
The bond had AA+ rating from the Indonesian Rating Company. The underwriters include Mandiri Sekuritas, Bahana Securities, Danareksa Sekuritas and Trimegah Securities.
EVP Coordinating Finance and Strategy of Bank Mandiri Pahala Mansyuri said the IDR3 trillion subdebt issuance was fully absorbed by market noting that the company has got IDR1 trillion offer.
Pahala said the bond issuance does not provide any call option mechanism.
The subdebt issuance refers to the BI regulation No.15/10/2008 on bank minimum equity requirement.
"If there is call option, the new regulation requires some conditions. For instance the subdebt coupon after call option is limited by 100 basis points or 50 percent of the early margin."

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