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Jakarta Post

Bank BJB to offer Rp 500b in bonds to expand loan disbursement

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Tue, January 28, 2020   /   07:30 pm
Bank BJB to offer Rp 500b in bonds to expand loan disbursement A board on the trading floor of the Indonesia Stock Exchange building in Jakarta, on Oct. 19, 2015, shows the trading data of stocks and the Jakarta Composite Index (JCI) . (JP/Wienda Parwitasari)

Publicly listed Bank Pembangunan Daerah Jawa Barat dan Banten (Bank BJB) will offer Rp 500 billion (US$36.74 million) worth of bonds in this year's first quarter as the first part of its second shelf-registration subordinated bonds valued at Rp 1 trillion.

The bank plans to use the proceeds to strengthen its capital structure and help expand its loan disbursement, as well as to expand the composition of the bank’s long-term financing, it said in a prospectus summary published in a local newspaper on Tuesday.

The company has set a target to increase its loan disbursement by 10 to 11 percent this year.

The subordinated bonds are set to be offered in two series, namely series A, which will be due in five years and series B, which will have a tenure of seven years. The yields, which will be paid every three months starting June 5, have yet to be determined.

"The [offering] of part II of the shelf-registration subordinated bonds or the next part [if any] will be determined at a later date," the summary read.

A subordinated bond is an unsecured loan or bond that ranks below other, more senior loans or securities with respect to claims on assets or earnings, according to Investopedia.

The Bandung, West Java, based bank has received an idA (single A) rating from local ratings agency Pefindo for the bonds, which will be listed on the Indonesia Stock Exchange (IDX).

It also received the full commitment of four securities firms to act as its underwriters, namely CIMB Niaga Sekuritas, Mandiri Sekuritas, RHB Sekuritas and Trimegah Sekuritas.

Stocks of Bank BJB, traded at the IDX under the code BJBR, fell 0.48 percent on Tuesday and have lost almost 52 percent of their value in the last 12 months.