BNI Releases US$600 Million AT-1 Bond For Limited Capital Repayments

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Bank Negara Indonesia Tbk. (BNI) is said to have just released the 2021 Additional Tier-1 Capital Bond worth US$600 million or around IDR 8.6 trillion (exchange rate of IDR 14,299). This corporate action is released with an interest rate of 4.3 percent per year referring to the provisions of Regulation S, based on the US Securities Act and registered on the Singapore Stock Exchange.

BNI Finance Director, Novita Widya Anggraini, said that this step is the company's strategy to take advantage of opportunities that are still very open as well as to expand the business.

According to Novita, her party is focusing on strengthening capital to add cushion in mitigating business risks that may arise amid uncertainty due to the COVID-19 pandemic.

“We see that development opportunities are very open, while capital is still limited. Therefore, we are strengthening our capital”, she said in a press statement, Monday, October 4.

Novita confirmed that the latest action had the blessing of the Financial Services Authority (OJK).

"OJK approved the determination of funds from the issuance of the 2021 BNI Additional Tier-1 Capital Bond as additional core capital. This provision is effective since the OJK decision letter was issued on September 30, 2021", she said.

Furthermore, Novita explained that in the series of issuance plans, on September 16, 2021, the company has completed the roadshow and pricing of AT-1 Capital Securities.

It was said that during the book-building process (initial offer), BNI received oversubscribed to more than US$1.8 billion, from the planned issuance of US$600 million.

Print history

An interesting fact emerged that BNI made a new history as the first bank in Indonesia to issue Additional Tier 1 capital instruments and offer them to foreign public investors.

Meanwhile, the proceeds from the issuance of the 2021 Additional Tier-1 Capital Bond are also used to strengthen capital, increase financing, general company funding, and strengthening the composition of the long-term fund structure.

Then, the latest debt securities from the bank with the BBNI stock code are financial instruments that have capital characteristics, are subordinated in nature, do not have a period of time, and the payment of yields cannot be accumulated (perpetual non-cumulative subordinated debt).

“This capital strengthening is our step to jump in and move faster. Under normal conditions, this kind of capital fulfillment can only be met in 2025. We will be the first bank in Indonesia to do so”, concluded Novita.