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T Mandiri Tunas Finance (MTF), a subsidiary of Bank Mandiri, plans to issue bonds worth Rp 1.25 trillion (US$128.6 million) within the next two years to boost its automotive credit financing,

MTF will sell a maximum of Rp 500 billion debt papers this year that will be divided into two series; those that would mature in three years (A series) and those that would mature in four years (B series). The debt papers have been granted idAA (double A) rating from domestic rating agency PT Pemeringkat Efek Indonesia (Pefindo).

The company appointed PT Mandiri Sekuritas as the underwriter for the bond issuance, the bonds will be offered on May 30 and 31. The debt papers are scheduled to be listed on the Indonesia Stock Exchange (IDX) on June 7.

Managing director of investment banking at PT Mandiri Sekuritas, Iman Rachman, said on Wednesday that the coupon rate for the A series bond would be between 7.35 and 8.15 percent per year and 7.4 and 8.2 percent per year for the B series.

MTF booked Rp 2.5 trillion in new lending in the first quarter of this year '€” mostly for automobile purchases '€” a 47 percent increase from the same period last year. Its target is to provide Rp 12 trillion in new lending by the year end.