The Jakarta Post
State-owned lender Bank Mandiri is set to issue asset-backed securities worth Rp 500 billion (US$38.2 million) in the form of participant letters (EBA-SP) as part of its efforts to diversify funding sources, especially long-term ones. The issuance will be carried out in partnership with state-run secondary mortgage firm Sarana Multigriya Finansial (SMF).
Mandiri, the country’s largest bank by assets, considers long-term funding essential to match loan products with long tenors, such as mortgages, infrastructure financing and the government-backed 1 million housing program that offers affordable mortgages for people in the lower-income segment.
“One of the solutions to diversify funding is by conducting securitization,” Mandiri finance and treasury director Pahala N. Mansury said in a press conference on Monday.
According to a Financial Services Authority (OJK) regulation, EBA-SP securities issuance can only be carried out through SMF, which takes over mortgage assets of a bank to provide fresh funds for the bank.
Pahala said the issuance comprised junior instruments worth Rp 43.5 billion and a senior one totaling Rp 456.5 billion, which would be divided into three-year and five-year tenors with their respective values set at Rp 103.5 billion and Rp 353 billion, adding that the bank had conducted book-building for the issuance, which was rated triple A from local rating agency Pefindo, and was waiting for the OJK’s effective statement to complete the closure by Aug. 25. (dmr)
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