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Jakarta Post

Mandiri's $500 million global bond oversubscribed by five times

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Wed, May 6, 2020   /   05:44 pm
Mandiri's $500 million global bond oversubscribed by five times A teller at a Bank Mandiri branch in Jakarta counts rupiah bills. (JP/Nurhayati)

Riska Rahman

The Jakarta Post/Jakarta

State-owned Bank Mandiri has successfully launched its US$500 million global bond as the demand from foreign investors, mostly from Asia and Europe, far exceeded the amount it offered.

The debt paper was oversubscribed by almost five times with demand reaching more than $2.4 billion, the bank said in a statement on Wednesday.

“Around 66 percent of the investors that bought the bond came from Asia, and the remaining 34 percent came from Europe, the Middle East, Africa and the United States,” the bank said in the statement.

The bank said the global bond offered a coupon of 4.75 percent per year, higher than the government’s global bond coupon of 3.9 percent issued in April. The five-year debt paper, Bank Mandiri said, would mature in 2025.

It is the second global bond issued by state-owned companies this month. On Monday, Hutama Karya successfully launched its first ever global bond of US$600 million with a coupon of 3.75 percent. The bond was also oversubscribed by six times from buyers amid high demand from investors in Asia, Europe, the Middle East and the United States.

The bank’s treasury and international banking director Darmawan Junaidi told The Jakarta Post that the proceeds from the bond issuance would be used to strengthen its financing capacity.

“It will also be used to support our business in the medium to long term,” he said via text message.

He went on to say that the issuance of new bonds followed last year’s global bond issuance of US$750 million that was part of the bank’s global bond ticket of US$2 billion.

State-Owned Enterprises (SOEs) Minister Erick Thohir lauded Bank Mandiri’s global bond issuance amid the uncertain global economic conditions.

“Investors' high interest in the global bond shows that Indonesia has become one of the world’s most interesting investment destinations,” he said, adding that he also encouraged other SOEs to seek other sources of funding and not only rely on funding from banks.

Bank Mandiri’s global bond issuance marks the second time SOEs have issued debt papers to the offshore market amid the COVID-19 pandemic.