Tuesday, February 16, 2010

CIMB Niaga to issue US$300 million bonds

PT Bank CIMB Niaga Tbk in semester I/2010 plans to issue subdebt worth US$300 million to cover the due date debt this year and next year.
this year the due date debt is US$100 million subdebt so it is necessary to get extra funding form market to cover the needs.
The fifth largest bank in Indonesia has mature liability in July 2010 worth US$100 million. Formerly the company in quarter I/2010 the company intended to issue IDR1 trillion-3 trillion subdebt.
The subdebt issuance is done to maintain the CAR at least above 14 percent from the current 15 percent.
Director of Bank Niaga Veronica Catherinawati Hadiman said the scheme is meant to increase corporate capitalization.
The plan to increase capital was formerly unveiled by the management of CIMB Group Holdings Berhad Malaysia, the holder of 77 percents shares of Bank CIMB Niaga, by injecting new capital along with the expansion and bonds with the 2010 July due date.
In 2010 management targets to have 20 percent credit growth following the sluggish performance in 2009. Thus it requires capital to maintain the CAR.
Research done by Samuel Sekuritas on February 8, 2010 estimated the gained profit per share of Bank CIMB Niaga this year stood at IDR64 or rose into IDR76 in 2011.
The stock price to profit ratio is estimated to reach 11.7 this year and decline to 9.9 in 2011.
The stock price to book value ration this year is predicted 1.6 and then 1.4 next year with the targeted corporate stocks price of IDR580.
Subdebt has equal rights (paripasu) with the overall existing subdebts or the upcoming ones. But the bonds have junior claim as form the claim of deposit obligation and other obligation owned by bank.
There is obligation as to certain requirement has the similar claim or lower than the subdebt. The subdebt interest usually is higher than senior bonds. The subdebt 1 notch rating is lower than the senior bonds.

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