OCBC NISP bond sales oversubscribed
Grace D. Amianti
The Jakarta Post
Publicly listed lender PT Bank OCBC NISP, part of Singaporean lender OCBC Bank, saw its Rp 3 trillion (US$236.3 million) continuous-bond offering on Tuesday oversubscribed by Rp 855 billion.
The sale of bonds, listed at the Indonesia Stock Exchange (IDX), was part of the lender's plan to offer continuous bonds over the next two years.
OCBC NISP president director Parwati Surjaudaja said the Tuesday listing was the second part of the bank's plan to raise a total of Rp 6 trillion, which would be due in the first quarter of 2015.
The lender had already sold Rp 3 trillion worth of bonds in 2013.
The bank previously planned to reevaluate the bond offering because the domestic financial market, along with those in other emerging economies, had suffered from severe volatility near the end of last year in anticipation of the US Federal Reserve's interest rate outlook.
'The oversubscription indicates a high trust among investors in the bank despite weak market conditions and tight competition in the banking industry,' Parwati said in a statement.
She said the bond was rated 'idAAA' by local ratings agency Pefindo as well as 'idAAA(idn)' from Fitch Ratings. That could be interpreted as 'showing the lender's ability to meet its long-term commitments toward its debt papers as well as maintain trust from investors'.
According to its official statement, the lender is offering one-year, two-year and three-year bonds with coupon rates of 9 percent, 9.4 percent and 9.8 percent, respectively.
The lender appointed six securities firms as underwriters, including Indo Premier Securities, Mandiri Sekuritas, NISP Sekuritas and OCBC Sekuritas.
Parwati said funds raised from the bond issuance would be fully used to finance credit expansion in 2015 and would help reduce its loan-to-deposit ratio (LDR).
OCBC NISP, now the 11th largest bank by assets in Indonesia, aims to post credit growth of at least 15 percent next year, in line with the target set by Bank Indonesia (BI).
OCBC NISP finance director Hartati previously said the lender's 2014 LDR might be pushed down by around four percentage points to 86 percent, supported by proceeds of debt-paper sales.
As reported before, BI said it would allow securities issued by banks to be included as one of the components of deposits. The move is seen as an effort to broaden the banks' funding sources, which are currently suffering from a tight environment.
Parwati said the lender would also be cautious about several business sectors in 2015 as they were still affected by the ongoing economic slowdown. 'We will pay more attention to the commodities and mining sectors and their supporting businesses,' she said.
Last year, OCBC NISP's net profits grew 17 percent to Rp 1.3 trillion from Rp 1.1 trillion in 2013. The growth of outstanding loans reached 7 percent to Rp 68.4 trillion, versus Rp 64 trillion in 2013.
Amid growing competition in the banking industry, Parwati said the lender managed to book Rp 72.8 trillion in third-party funds (DPK) last year, an increase of 6 percent from Rp 68.93 trillion in 2013. DPK consists of savings, demand deposits and time deposits.
The bank's shares are listed on the IDX under the 'NISP' code. The price of shares dropped 1.48 percent to Rp 1,330 apiece on Tuesday from the previous day.
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