Barclays & JP Morgan handle US$300 million bonds BNI

PT Bank Negara Indonesia Tbk hired Barclays & JP Morgan to underwrite IDR300 million subordinate bonds.

The proceeds tapped from the subdebt issuance will be allotted to increase CAR for BNI credit expansion this year which is targeted to grow by 15-20 percent.

With the additional US$300 million capital, it is to increase CAR by 1-2 percent from the current position of 14.2 percent. This will boost up the CAR on tier II. It is no the whole capital."
Based on BI regulation, bank could use subdebt issuance to boost up car in tier II. But the central bank commonly counts 50 percent of the total subdebt as the capital instrument.