CIMB Niaga Bank will issue its first rupiah-denominated bonds with a total value of Rp 1.5 trillion (US$162 million) next month to strengthen the bank’s consumer financing.
Vice president director Catherine Hadiman said Thursday that the bonds, which would be offered to the public from July 1 to July 5, was rated AA- by Fitch Rating Indonesia.
Catherine added that the seven-year bonds, which were expected to be listed on the Indonesia Stock Exchange (BEI) on July 9, would carry a coupon with an annual yield of 11 percent.
“The bond yields will be paid every three months,” she said.
Catherine said the proceeds from the issuance of the bonds would enable the bank to increase its capital adequacy ratio (CAR) from the current 13.03 percent to 15 percent.
“With the increased CAR, we will be able to expand our lending,” she said at the bonds’ public exposé in Jakarta.
PT Bahana Securities, PT CIMB Securities Indonesia, and PT Mandiri Securitas are underwriting the bond offering.
CIMB, created from the merger of Bank Niaga and Bank Lippo in November 2008, booked an increase in auto vehicle loans of 49 percent to Rp 9.7 trillion in the first quarter from Rp 6.5 trillion in the same period last year. Meanwhile, the bank’s total loans increased by 14 percent to Rp 83.7 trillion in the first quarter.
CIMB finance director Wan Razly Abdullah said the bank needed to expand its car and motorcycle financing to take advantage of the country’s growing automotive market.
In the first quarter, the bank booked an increase in net interest income by 16 percent to Rp 1.66 trillion from Rp 1.43 trillion in the same period last year.
“We will not use the fund acquired from the bond issuance to repay our debts because our internal cash reserves are sufficient for that purpose,” he added.
A previous report said the bank had to repay $100 million in debt, which was due in July this year. From January to March, CIMB’s net profit doubled to Rp 524.2 billion from Rp 262.7 billion in the same period last year. (rch)
