INDONESIA - CAPITAL MARKETS - Bank Muamalat Gets Ball Rolling On Fund-Raising With Bond Sale

www.thejakartaglobe.com - Bank Muamalat, an Islamic lender in Indonesia, is planning to raise Rp 800 billion ($85 million) from the sale of subordinated Islamic debt this week.

The bank, which is partly controlled by the Islamic Development Bank, is offering the 10-year Islamic notes to investors today and plans to list the debt on the Indonesia Stock Exchange next Monday.

The offering will be the first as part of Bank Muamalat’s long-term plan to raise Rp 1.5 trillion within two years, the lender said in a brief prospectus published in Investor Daily on Monday.

Indonesia is the world’s largest Muslim population country, with Muslims comprising 85 percent of its 240 million population.  (source)


Many companies, including lenders, have been seeking funds from the market to capitalize on low borrowing costs in Indonesia.

In a bid to boost economic growth, the country’s central bank, Bank Indonesia, kept its benchmark rate at 5.75 percent earlier this month, a record low since it was introduced in July seven years ago.

Bank Muamalat is 32.74 percent owned by Islamic Development Bank, 19.3 by Kuwait’s Boubyan Bank, 17.91 percent by Atwill Holdings, 6 percent by the National Bank of Kuwait and the rest by various shareholders.

It has 56 branches across the country, the prospectus showed.

There are 11 Shariah-compliant lenders in Indonesia, including Bank Syariah Mandiri and Bank Mega Syariah.

The 11 lenders held total assets of Rp 152.3 trillion as of March this year.

Bank Muamalat has hired Bahana Securities, Danareksa Sekuritas and Indo Premier Securities to help arrange the sale of the Islamic bonds.

Islamic bonds, known as sukuk, comply with Shariah law by using asset returns to pay investors instead of offering interest.

Source; http://www.thejakartaglobe.com/business/bank-muamalat-gets-ball-rolling-on-fund-raising-with-bond-sale/526700  - June 27, 2012