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ublicly listed lender PermataBank aims to raise Rp 1 trillion (US$81.8 million) from subordinate bond sales this year to support its credit growth as well as boost its capital to meet new Basel III requirements.

The bond, which will have a maturity period of seven years, will carry a coupon rate of 11.75 percent per annum, with the coupon payment made quarterly.

The bond offering period will take place on Oct. 20-21. PermataBank will list the bonds on the Indonesia Stock Exchange (IDX) on Oct. 27.

The lender has appointed PT Standard Chartered Securities Indonesia, PT Mandiri Sekuritas, PT Indo Premier Securities and PT RHB OSK Securities Indonesia as underwriters for the bond sales.

Credit rating agency PT Pemeringkat Efek Indoensia (Pefindo) has assigned an AA rating for the bonds, of which Rp 406 billion is guaranteed with full commitment and the remaining Rp 594 billion with best effort.

PermataBank acting president director Roy Arman Arfandy said on Wednesday that the bond issuance was part of his firm'€™s larger plan to reap Rp 3.5 trillion from the bond market to strengthen its business and meet the new Basel requirements.

'€œWe already raised Rp 860 billion from a similar bond issuance last year. We will also issue Rp 1.7 trillion in subordinate bonds next year, probably in the second semester,'€ he said.

PermataBank would use the raised funds to help the firm meet Basel III requirements and partly to develop the lender'€™s credit business, he said.

Basel III is a global voluntary regulatory standard on bank capital adequacy, stress testing and market liquidity risk, designed to reshape the credit industry by imposing stricter discipline on credit cards, mortgages and other loans to prevent financial meltdown.

Under Basel III, banks must have at least 6 percent in their mandatory reserve ratio known as Tier 1 capital ratio by 2019.

PermataBank'€™s capital adequacy ratio (CAR) was 13.6 percent as of June, far higher than Bank Indonesia'€™s (BI) minimum CAR requirement of 8 percent.

PermataBank, which is a subsidiary of publicly listed diversified conglomerate PT Astra International, is aiming to see between 13 and 14 percent net profit growth this year from Rp 1.72 trillion last year.

The firm has revised its credit growth target to 12 to 14 percent this year from its original target of 15 percent, mainly due to the country'€™s economic slowdown.

Roy said PermataBank had provided a number of syndicated loans this year, including Rp 1 trillion for oil and gas contracts and Rp 300 billion for multi-financing. '€”JP/Khoirul Amin