Indonesia Eximbank, the nation’s export financing agency, plans to sell Rp 3.87 trillion ($397.3 million) in bonds later this month to finance its business in Southeast Asia’s largest economy.
Jakarta-based Eximbank has hired Bahana Securities, CIMB Securities Indonesia and Standard Chartered Indonesia to help arrange the debt sale.
The agency is offering the notes to investors from May 17-20 with a May 24 planned listing on the Indonesia Stock Exchange, EximBank said in a brief prospectus published in Investor Daily on Thursday.
The company plans to sell Rp 1.92 trillion of one-year bonds, for which it has set the coupon at 6.15 percent, it said. The company will also sell Rp 806 billion of two-year bonds with a coupon set at 6.4 percent and Rp 1.134 trillion of three-year bonds at a coupon of 6.4 percent.
“Proceeds from the bond sale will be used by Eximbank to invest in various instruments,” the company said.
News on Eximbank’s notes sale comes after Standard & Poor’s revised its outlook of the country’s sovereign debt rating from “positive” to “stable.”
The rating assessor said in a statement that it cut the outlook, citing concerns about stalling reform momentum in Indonesia.
Still, the rating agency maintained its credit rating for Indonesia’s long-term sovereign debt at BB+, one notch below investment grade, and B for short-term sovereign debt. Standard & Poor’s is the only global rating agency that has not put Indonesia on the investment grade.
Indonesia Eximbank total assets in December last year were Rp 33.32 trillion, 26.59 percent higher than the Rp 26.32 trillion total in 2011, according to the company’s website.
Meanwhile the company’s total financing rose 30.4 percent to Rp 26.78 trillion last year from Rp 20.54 trillion in 2011. The rupiah-denominated financing accounted for 52 percent and the foreign-denominated currency accounted for the remainder.
Eximbank is among several Indonesian banks that are turning to the debt market to finance their business plans this year. They are doing so to capitalize on low borrowing costs in the country.
Indonesia’s central bank, Bank Indonesia, has kept its benchmark rate at a record low of 5.75 percent since February last year to provide leeway to spur economic growth in Indonesia.
Garuda Indonesia, the state flag carrier, plans to sell Rp 2 trillion worth of bonds in June this year.
Bank Mandiri, the country’s largest lender by assets, also plans to sell $800 million of dollar-denominated bonds this year.
Bank Rakyat Indonesia or BRI, which focuses on small and medium sized companies, raised $500 million from selling five-year senior unsecured bonds in March, providing the lender with more financial flexibility this year.
BRI will use the proceeds from the bond sale to finance its general activities, as well as improving the lender’s financing structure.
BRI hired Citigroup Global Markets and Standard Chartered Bank as financial adviser for the debt sale.