The countrys largest bank in assets PT Bank Mandiri Tbk said it will issue bonds valued at Rp5 trillion to strengthen its fund structure and finance credit expansion.
Director of Wholesale Banking of the publicly listed state lender Royke Tumilaar said here on Monday the result of the bond sales would give room for expansion to support government targets especially in the procurement of basic infrastructure.
Royke said the bond would be issued in two types of instrument — bond with coupon and zero coupon bond.
Bond with coupon consists of three series — series A to be repayable in three years, with coupon rate of around 7.70-8.45 percent; series B for 7 years with coupon rates of 7.95-8.70 percent and series C for 10 years with coupon rates of around 8.05-8.80 percent.
Zero coupon bond will be repayable in 3 years with yields of around 7.40-8.15 percent. The zero coupon bond is issued to serve only to diversify financing instruments for the bank, Royke said.
“The zero coupon bond is expected to attract the interest of investors that would increase the bond market activities in the country. In addition it will provide more options for investment,” she said.
Silvano Rumantir, President Director of Mandiri Sekuritas as an underwriter of the zero coupon bond expressed optimism that the bond would attract investors as Bank Mandiri has good reputation.
Silvano said Mandiri Sekuritas would study the market trend and bond market development in the country before it decided allocation of the bond.
Zero coupon bond is one that would not offer periodical interest, but it is issued with big discount from the nominal value and to be repaid at maturity date.
Bank Mandiri has named five underwriters for the bonds including Mandiri Sekuritas, Bahana Sekuritas, BCA Sekuritas, BNI Sekuritas, and Danareksa Sekuritas.