Indonesia: BII to Raise Rp 1.8t From Bonds, Sukuk

Jakarta. Bank Internasional Indonesia, the local unit of Malaysia’s Maybank, plans to raise Rp 1.8 trillion ($151 million) from selling conventional and shariah compliant notes later this month, to finance its domestic lending activities.

The lender, commonly known as BII, is offering the Islamic notes, known as sukuk, along with regular bonds from June 19 until June 25.

The notes are expected to be listed on the Indonesia Stock Exchange (IDX) on July 10, the company said in a statement distributed in Jakarta on Thursday.

The lender is offering Rp 300 billion in three-year sukuk with an indicative rate in the range of 9 percent to 10 percent per annum.

It is also offering Rp 1.5 trillion in seven-year notes, for which it has set the coupon rate in the range of 10.75 percent to 11.75 percent per annum, the company said in the statement.

The sukuk sale is a part of the lender’s larger plan to raise Rp 1 trillion from selling sukuk over the next several years. The Rp 1.5 trillion bond sale is also part of the lender’s plan to raise Rp 3 trillion from bonds within two years, the company said in the statement.

All proceeds from the sukuk sale will be used to support business growth at BII’s shariah subsidiaries for Islamic compliant financing, while proceeds from the subordinated bond sale will be used to finance lending activities in Indonesia.

BII named HSBC Securities Indonesia, Indopremier Securities, Mandiri Sekuritas, and its affiliate Maybank Kim Eng Securities to help manage the debt sales.

Profit at BII fell 38.8 percent to Rp 189.1 billion in the first quarter of this year from the same period last year. Its lending dropped nearly 1 percent to Rp 93.6 trillion during the period.

Separately, BII’s financing unit Wahana Ottomitra Multiartha also aims to raise Rp 600 billion from selling one-year and three year bonds from June 19 to June 20.