The Indonesian Export Financing Agency ready to pay debt worth of Rp1 trillion (US$68.96 million), said the company today - Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – The Indonesian Export Financing Agency or Eximbank ready to pay debt worth of Rp1 trillion (US$68.96 million), said the company today. In August 15 of this year, the state firm has obligation to repay its bond issued in 2017 with the same amount an has a coupon rate of 7.6 percent per year.

The management said, the company has provided funds to pay the principal debt at the maturity from various liquid financial instruments including placements with banks. Beside, the matured bond, the financial company still has bonds maturing on Sept. 16, 2020 with total values of Rp913 billion and  on Nov. 9, 2020 worth of Rp600 billion.

As the government armed, the lender provide national export financing for business entities, including individuals domiciled in and outside of Indonesia. The Eximbank‘ initial capital is set at at least Rp4 trillion that separated and not divided into shares.

Recently, the government through Eximbank and Infrastructure Guarantee Fund has providing support for corporations involved in labor-intensive projects in the form of working capital loans.  The working capital credit guarantee scheme will be given to credit with a ceiling of Rp10 Billion to Rp1 Trillion and is targeted to create Rp100 trillion working capital Credit until 2021.

According to senior economic minister, Airlangga Hartarto, the corporate guarantee in the framework of National Economic Recovery Program (ERP). He added, the implementation of this program was carried out through modalities for Placement of Funds to Banking, Guaranteed Working Capital Loans, Participation of State Capital, Government Investment, and support for state expenditure.

The company is regulated by Law Number 2 of 2009, which establishes the role of entity policy, legal status, supervision, dividend policy, and options for capital injection. This means that the bank is not subject to the state bankruptcy law, and can only be dissolved by the Special Parliamentary Act.

As planned, the government will inject another Rp5 trillion in this year, although part of it will be offset by a one-time increase in loan-loss provisions. The Eximbank’ liquidity improved marginally in 2019, helped by debt refinancing, a shrinking loan book and the capital infusion.

While, the bank remains susceptible to external market conditions as a result of its reliance on wholesale funding, refinancing risks are somewhat mitigated by its quasi-sovereign status.

US$1: Rp14,500

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