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tate lender Bank Tabungan Negara (BTN) hopes to generate around Rp 7.65 trillion (US$590.64 million) to Rp 10 trillion from a rights issue next year, which it claims will help strengthen its capital status and enable it to channel higher mortgage.

BTN president director Maryono said on Wednesday that it was currently finalizing the rights issue plan with the State-Owned Enterprises (SOE) Ministry.

'€œWe actually wanted to include the plan in the discussions of the revised 2015 state budget, but there was not enough time to do that. So, if all goes well, it will be included in the draft 2016 state budget,'€ he said.

The government is expected to contribute to BTN'€™s rights issue by injecting between Rp 4.6 trillion and Rp 6 trillion of the targeted funds. The capital injection will be equal to the 60.1 percent stake that it has in the bank right now.

To proceed with the rights issue, the government will need to obtain approval from the House of Representatives. Deliberation on next year'€™s state budget will commence at the House in August, when the President delivers his annual speech and the state budget.

Gatot Trihargo, SOE Ministry'€™s assistant to the minister for business services, acknowledged that it would nominate BTN to the House as the only state bank to receive the capital injection in 2016.

The ministry previously nominated Bank Mandiri to the House for a similar capital injection in 2015, but the proposal was turned down by lawmakers.

According to Maryono, BTN will see its capital adequacy ratio (CAR) rise higher than 14.6 percent, supported by the rights issue funds.

'€œStronger capital will enable us to disburse higher mortgage, especially because the government has assigned us to realize the one million housing program,'€ he said.

The program, as the name suggests, seeks to reduce housing backlog by providing people with at least one million new houses per year. Data from the Public Works and Public Housing Ministry said that housing backlog amounted to 13.5 million units as of 2014.

Between this year and the next, the housing works will consist of the construction of 140,000 low-cost rental apartment units (rusunawa), 460,000 subsidized houses under the housing loan liquidity facility (FLPP) and 400,000 non-subsidized houses under the regular mortgage scheme.

Meanwhile, BTN is looking to generate a hefty amount of funds from a series of securities issuances in the first half of the year as well.

BTN treasury director Iman Nugroho Soeko said it would issue Rp 3 trillion worth of bonds, Rp 1.5 trillion worth of mortgage-backed securities (KIK-EBA), Rp 1.5 trillion worth of asset-backed securities (EBA-SP) and Rp 1 trillion worth of negotiable certificates of deposit (NCD).

'€œHopefully all will be completed in the first half, so that we can begin using the funds in July,'€ he said after BTN held a public expose at the Indonesia Stock Exchange (IDX).

The bonds will be available in three series, each having a maturity period of five years, seven years and 10 years. BTN has appointed CIMB Securities Indonesia, Danareksa Sekuritas, BCA Sekuritas and Trimegah Securities as underwriters for the bonds issuance.

Iman added that besides from the securities, BTN also stood a chance of obtaining fresh funds from the Asian Development Bank (ADB) through a loan program. '€œIt will amount to around $160 million, but talks are still ongoing,'€ he said.