Bank Tabungan Negara (BTN) has issued a Basel III-compliant
tier two bond worth $300 million. A first for Indonesia.
Lawyers involved in the deal said that it sets a precedent for
other banks looking to tap Basel III compliant securities from
the international markets.
The securities are due 2025 at 4.2% and are listed on the
Singapore Stock Exchange. The Ba3 rated bonds had strong
investor demand and were 12.3 times oversubscribed.
Linklaters counsel Phill Hall, who advised the joint lead
managers, said the main challenge was ensuring that the
expectations of regional regulatory capital investors matched
up with the requirements under Indonesia’s
financial services authority Otoritas Jasa Keuangan (OJK). Bank
Indonesia guidelines were also necessary to ensure that BTN
received approvals for the issuance.