Moody's Investors Service has today affirmed PT Federal International Finance (FIF)'s Baa2 long-term local and foreign currency issuer ratings, and Prime-2 (P-2) short-term local and foreign currency issuer ratings - Photo by FIF Group

JAKARTA (TheInsiderStories) – PT Federal International Finance (FIF), an Indonesia multi-finance company launched local bonds worth of Rp1.3 trillion (US$89.66 million for retail investors, said the company today (26/09). The bonds consist of two series, Series A with a 370-day tenor and Series B with a 36-month tenor.

Series A with a principal amount of Rp639 billion offering interest 7.50 percent per year and will mature on Oct. 5, 2019. Series B with a principal amount of Rp671 billion with fixed interest of 8.75 percent per year will mature on Sept. 25, 2021.

According to the chief executive Margono Tanuwijaya the issuance of this bond was one
the aim is to support Honda motorcycle financing. Currently, sales of Honda dominate motorcycle sales in Indonesia with market share reaching 74 percent up to June 2018. Honda motorcycle sales are mostly carried out through credit, which last year reached 67 percent of total sales.

It said, the public offering period has been held on Sept. 19 to 20, 2018. These bonds will be listed on the Indonesia Stock Exchange on Sept. 26, 2018.

The underwriter of the bond issuance are PT BCA Sekuritas, PT DBS Vickers Indonesian Securities, PT Indo Premier Securities, PT Mandiri Sekuritas, PT Danarekasa Sekuritas and PT Trimegah Sekuritas Indonesia Tbk (IDX: TRIM).

Last April, for the first time, FIF announce to offer a medium term notes (MTN) in euro currency. Recently, the Financial Services Authority simplified the procedure of selling bonds in the capital market for alternative funding. The regulator has issued two regulations – on green bond procedures to raise money backed by natural resources and on an e-registration system to boost its service efficiency and transparency to stakeholders.

Based on its official disclosure statement in Indonesia Stocks Exchange on April 24, the company under conglomeration company PT Astra Internasional Tbk (IDX: ASII) aim to raise 819 million euro (US$1 billion) from the issuance at the second half of this year.

It said, the issuance of the global bond was part of the company’s efforts to diversify the source of fund. The majority if FIF financing comes from domestic bond issuance, joint financing with other financial institutions and bank loans.

Based on the company’s financial statements at the end of March 2018, a number of bonds will mature in this year. Bonds has issued in 2015 matured on April 24 with worth Rp2.06 trillion with an interest rate of 9.25 per cent.

Other bond Rp 587 billion with interest rate of 9.25 per cent also will mature on Sept. 11, 2018. In addition, there are also two bonds maturing in 2019, consisting of Rp2.50 trillion with a coupon of 9.15 per cent due on April 5, 2019 and Rp1.25 trillion with an interest rate of 7.95 per cent and matured on Sept. 27, 2019.

The company also has a total bank loan of Rp9.62 trillion. As for the amount that will mature less than one year reached Rp7.42 trillion, while the rest will mature until 2021.

Motorcycle sales in Indonesia fell slightly in 2017, an improvement was detected. Motorcycle sales fell 0.76 percent year-on-year (YoY) to 5.88 million units in 2017, improving from a 8.4 percent (YoY) decline in the preceding year.

However, the Indonesian Motorcycle Industry Association predicts a rebound as it expects growth up to 3 percent in annually basis, or around 6 million motorcycles in 2018.

FIF has made a public offering of bonds since 2002, in total the bonds that have been issued reach Rp. 23.75 trillion and those that have matured and repaid in the amount of Rp11.49 trillion.

FIF Group was established under the name of PT Mitrapusaka Artha Finance in May 1989. Based on the business license obtained from the Minister of Finance, the Company is engaged in Leasing, Factoring and Consumer Financing.

In 1991, the company changed its name to PT Federal International Finance. But in line with the development of time and to meet market demand, the Company began to focus on financing Honda motorcycles in the field of consumer financing in retail. In May 2013, the Company launched the FIFGROUP brand.