PT Sarana Multigriya Finansial (SMF) proposed medium term notes (MTN) II/ 2010 up to IDR 400 billion with 360 days maturity, and to its senior unsecured bond IV/2011 totalling up to IDR 800 billion with two-and-three-years maturity. SMF was picks Danareksa Sekuritas to underwrite MTN issue.
Fitch Ratings has today assigned expected AA(idn) ratings to SMF proposed. Both expected ratings take into account the likely state support given the government's full ownership of SMF, and the latter's public role in developing a national secondary mortgage market to promote affordable homeownership. The expected ratings also recognise SMF's limited track record (five years), and the absence of an explicit state guarantee on its obligations.
SMF provided a mortgage financing program to five mortgage lenders in Q310 totalling IDR1.2 trilion, with loans to state-owned PT Bank Tabungan Negara (national long-term rating: 'AA-(idn)/stable) comprising 98% of the total lending.
Loan expansion will be funded by existing capital and borrowings, with the latter through the planned issuance of the MTN II/ 2010 and senior bonds IV/2011 of up to IDR1.2 trilion. Fitch notes that there is also a plan to inject fresh equity by the government, possibly in 2011.
SMF has remained profitable since inception. The contribution of income from loans rose to 56.3% of total interest income at end-September 2010 (2009: 47%; 2008: 41%) as a result of the expansion of its lending activities. SMF was established by the government of Indonesia in 2005, and is regulated and supervised by the Ministry of Finance.
SMF has remained profitable since inception. The contribution of income from loans rose to 56.3% of total interest income at end-September 2010 (2009: 47%; 2008: 41%) as a result of the expansion of its lending activities. SMF was established by the government of Indonesia in 2005, and is regulated and supervised by the Ministry of Finance.
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