REPUBLIKA.CO.ID, JAKARTA -- Publicly traded lender PT Bank Bukopin Tbk has offered a sub-ordinate bond valued at Rp1 trillion hoping to raise fresh fund to finance expansion.
The bond offered on Monday was the first of two parts of sub-ordinate bonds the bank plans to issue with a total value of Rp2 trillion, its president director Glen Glenardi said.
"The bond was part of the business expansion program of the bank to increase its financing capacity" Glen said.
The bond, carrying a coupon rate of 11.4 - 12 percent a year, is repayable in seven years, he said.
The bond has been given a rating of idA- (single A minus, stable outlook) by the country's rating agency PT Pemeringkat Efek Indonesia (Pefindo).
Glen said in addition to increasing the financing capacity of the bank, which is partly owned by the government, the bond fund is needed to to comply with the regulation of the Financial Service Authority (OJK) to strengthen long term financing capacity.
"With the additional capital, the bank would have more leeway for business expansion especially in eastern Indonesia," he said.
By the end of 2014, Bank Bukopin had a core capital of Rp5.6 trillion.
"We will strengthen business in the retail segment while maintaining the growth trend in the commercial segment," he said.
He said if the plan to issue the first of two phases of the sub-ordinate bond went as expected, the assets of the bank are expected to grow 14-15 percent per year and its third party fund would increase 14-16 percent and profit to rise 15-16 percent.
The fund from the sales of the bond is expected to keep the bank's "capital adequacy ratio" (CAR) at around 14.7-15.6 percent.
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