JAKARTA: PT Bank Syariah Mandiri will sell IDR500 billion worth of
subordinated sharia bond through several phases in a process it hopes to
finalize by next year.
The corporate action aims to boost capital adequacy ratio once eroded due to financing expansion. Bank Syariah Mandiri (BSM) President Director Yusla Fauzi said the first phase of the debt issue would be sold later this year. (source)
The corporate action aims to boost capital adequacy ratio once eroded due to financing expansion. Bank Syariah Mandiri (BSM) President Director Yusla Fauzi said the first phase of the debt issue would be sold later this year. (source)
“BSM will first consider market condition before setting the respective amount of each issuance. The issuance process for 2011 is ongoing,” he told Bisnis yesterday.
This year’s issuance covers only one series, namely Sukuk Subordinasi Notes Mudharabah BSM 2011, which matures in 10 years with a call option in the fifth year.
The subebt issuance employs shelf registration scheme, said BSM Director and Chief Financial Officer Zainal Fanani. “We are still processing the underwriter,” he said.
Shelf registration is a new issuance scheme, enabling a company to issue large amount of bonds within two years in several phases of issuance without submitting a complete documentation requirement that is required in ordinary bond issuance.
The bond issue is needed to raise capital adequacy ratio (CAR) that was declining due to extensive financing distribution,
In accordance with Bank Indonesia regulations, up to 50% of the subdebt issue proceeds can be calculated as complementary capital. CAR BSM was at 11.06% at the end of September 2011, fell by 41 basis points compared to the same period last year.
The declining CAR was mainly the result of a 60.44% growth in financing expansion, which amounted to IDR34.40 trillion compared to the same period last year.
Yuslam has said that in order to back further financing expansion next year, the company would require at least IDR800 billion in additional capital. The major amount of this capital injection is sourced from its parent company, PT Bank Mandiri Tbk while the remainder would be generated from other sources such as a subdebt issue.
However, BSM’s subdebt issue plan was denied by Sunarso, Bank Mandiri Director and BSM Supervisor. According to him, Bank Mandiri has agreed to inject IDR1.1 trillion in additional capital until 2013 to BSM. (20) (T02/msw)
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