UOB Indonesia offers Rp 1.1 trillion in bonds to strengthen lending

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.