TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
CIMB Niaga taps into bond market to boost financing capacity
CIMB Niaga expects to raise Rp 6 trillion from the offering of the regular bonds and Rp 2 trillion from the issuance of subordinate bonds.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A man conducts a transaction at a CIMB Niaga ATM in Jakarta. (Antara/Rosa Panggabean)
P
rivate lender CIMB Niaga will issue a series of regular bonds and subordinate bonds to strengthen its capital structure and financing capacity amid reports of liquidity tightening in the banking system.
CIMB Niaga strategy and finance director Lee Kai Kwong said in Jakarta on Monday that regular bonds, which comprise series A, B, C, and D, and subordinate bonds consisting of series A and B, will be issued in stages until the end of 2020. The two different bonds will all be in the form of shelf registration bonds.
Lee said the bank expected to raise Rp 1 trillion (US$71.42 million) from the first phase of the regular bond issuance and Rp 100 billion from the subordinate loans, which would be offered later this month.
“We hope these obligations entice investors and boost further growth in CIMB Niaga’s business operations,” Lee said.
In total, the bank expects to raise Rp 6 trillion from the offering of the regular bonds and Rp 2 trillion from the issuance of the subordinate bonds, he said.
The series A bonds with a maturity of 370 days will carry a coupon rate of between 6 percent and 6.75 percent per annum, while series B bonds with a tenor of two years will carry a coupon rate of between 6.50 percent and 7.25 percent. Series C will have a maturity period of three years and carry a coupon rate of between 7 percent and 7.75 percent and series D, with a maturity of five years will carry a coupon rate of 7.40 percent and 8.15 percent.
In comparison, series A subordinate bonds with a maturity of five years will carry a coupon rate of between 7.75 and 8.50 percent, while the series B subordinate bonds with a maturity of seven years will carry a coupon rate of between 7.85 and 8.60 percent.
