UOB Indonesia offers Rp 1.1 trillion in bonds to strengthen lending
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United Overseas Bank (UOB) Indonesia plans to issue Rp 1.1 trillion (US$84.5 million) in bonds in November. The issuance hopes to raise cash to support the bank’s lending capacity next year.
UOB Indonesia president director Kevin Lam said Rp 1 trillion in proceeds would come from the senior bond while the remaining Rp 100 billion would come from the subordinated bond. Both will be offered from Nov. 17 until Nov. 22.
“The bond will enable us to maintain solid funding as we help our customers seize business opportunities arising from increased infrastructure development and consumer demand,” he said during a public expose in Jakarta on Wednesday.
The senior bond is divided into three series with a buy-back option, he further explained.
Series A is offered with 370 days of maturity and a 7.4 percent coupon rate per annum. Series B will mature in 3 years with an 8.25 percent coupon rate. Series C will have a 5-year tenor with a coupon rate of 8.5 percent.
Meanwhile, the subordinated bond has a 7-year tenor with a 10 percent coupon rate. All the coupons will be paid every three months.
In the first half of 2016, UOB Indonesia saw its interest income increase by 22.32 percent year-on-year (yoy) to Rp 1.73 trillion.
Net profits rose by 86.81 percent yoy to Rp 281.69 billion.
Questions & Answers
Q.What is the total value of bonds UOB Indonesia plans to issue?
What is the total value of bonds UOB Indonesia plans to issue?
UOB Indonesia plans to issue Rp 1.1 trillion in bonds. This includes Rp 1 trillion from a senior bond and Rp 100 billion from a subordinated bond.
Q.When will these bonds be available for purchase?
When will these bonds be available for purchase?
Both the senior and subordinated bonds will be offered to investors from November 17th until November 22nd.
Q.What is the bank's primary reason for issuing these bonds?
What is the bank's primary reason for issuing these bonds?
The bank intends to raise cash to support its lending capacity next year. This funding will help customers seize business opportunities from increased infrastructure development and consumer demand.
Q.What were UOB Indonesia's financial results for the first half of 2016?
What were UOB Indonesia's financial results for the first half of 2016?
In the first half of 2016, UOB Indonesia's interest income increased by 22.32 percent year-on-year to Rp 1.73 trillion. Net profits rose by 86.81 percent year-on-year to Rp 281.69 billion.