JAKARTA (TheInsiderStories) - Moody’s Investors Service has assigned a (P)Ba2 long-term foreign currency subordinate debt rating to the Tier-2 notes component of state lender, PT Bank Negara Indonesia Tbk (IDX: BBNI) Euro medium-term notes program. The rating does not apply to individual securities issued under the program.
The ratings of the individual securities will be subject to the agency review of their terms and conditions, as well as the pricing supplements set forth at issuance. The rating is two notches below the bank’ baa3 Adjusted Baseline Credit Assessment.
Moody’s does not incorporate any government support uplift into the rating, as these securities are intended to be loss-absorbing in the event of financial stress at the bank. Under the draft terms and conditions, the Tier-2 capital securities will constitute direct, unsecured and subordinated obligations of Bank Negara Indonesia, and they will rank pari passu with all other subordinated debts classified as Tier-2 capital.
The interest payments from these securities will be deferred on a cumulative basis, if the bank is unlikely or unable to meet regulatory capital requirements. The principal and interest of these securities will be written down, partially or in full, upon the occurrence of a non-viability event.
On May 12, 2020, Bank Negara Indonesia has released a Euro Medium Term Notes (EMTN) program worth a total of $2 billion on the Singapore Stock Exchange for capital and loans expansion. One of the largest bank in the country, also has issued negotiable certificates of deposits with worth of Rp2.39 trillion ($165.79 million) divided in five series.
Series A have a nominal value Rp430 billion with tenure three months and discount rate 6.3 percent per annum. Series B with total amount Rp250 billion have a discount rate 6.5 percent and a six month tenure. Series C with tenure nine months and a discount rate of 6.59 percent worth of Rp50 billion. Series D with a nominal Rp1.6 trillion with one year tenure and a discount rate 6.69 percent.
Finally, the Series E was issued with value of Rp50 billion have a discount rate of 6.79 percent and one year tenure. Bank Negara Indonesia stated its eager to acquire bank, multi finance and general insurance firm in this year. For the actions, the bank prepared funds up to Rp4 trillion.
In addition to these two types of company, the lender also intends to buy multi-finance to further expand the scope of existing businesses. Currently, the local bank has five subsidiaries namely PT BNI Syariah, PT BNI Life, PT BNI Multifinance, PT BNI Securities and PT BNI Asset Management.
US$1: Rp14,400
Written by Staff Editor, Email: theinsiderstories@gmail.com
