Bank CIMB Niaga plans to have rights issue

PT Bank CIMB Niaga Tbk plans to have rights issue to bolster the capitalization structure. However, the company has study the subdebt issuance worth US$300 million this year to increase capitalization ratio and refinance the mature debt this year and next year.
Vice President Director of Bank CIMB Niaga Veronica Catherinawati Hadiman said the company will get the best and most affordable option to increase the capital adequacy ratio (CAR).

The fifth largest bank in Indonesia here has US$100 million mature debts in July and also has US$200 million bonds with 2011 due date.
The notes here comes from the bond issuance executed by PT Bank Lippo Tbk which was then merged with PT Bank Niaga Tbk and created new entity, Bank CIMB Niaga.

In 2010, the management targets to grow the credit by 20 percent after the sluggish corporate financing performance in 2009 which thus requires captial to maintain CAR.
The subdebt has the same rights (paripasu) with all existing and the upcoming subdebt issuance. However, the bonds have junior claim than the deposit claim and other obligation claim owned by the bank except certain obligation with certain conditions which equal claims or lower than the subdebt. Subdebt coupon is normally higher than the senior bonds. in general, subdebt rating is 1 notch lower than the senior bonds.