02/04/2024. PT Bank Negara Indonesia (Persero) Tbk, or BNI, has made a spectacular achievement by issuing global bonds worth US$500 million, or IDR 7.9 trillion. The obligation, which is part of the Euro Medium Term Note (EMTN) offering, was oversubscribed by up to 6.4 times at the Initial Pricing Guide (IPG).
BNI Finance Director Novita Widya Anggraini said that the high level of investor interest in BNI Global Bonds reflects investor confidence in the company's fundamentals and future prospects.
"The fundamental transformation we have undertaken has attracted investor interest in purchasing BNI Global Bond. 6.4 times oversubscriptions show a high level of investor confidence in the company," Novita said in the "Money Talks Power Lunch" program on CNBC TV, Tuesday. (2/4/2024).
Global Bonds issuance is part of BNI's strategy to diversify funding sources and support the company's strategic steps in increasing business growth, not only in rupiah but also in foreign currency (forex).
She explained that BNI Global Bond is part of the EMTN which was formed on May 6, 2020 and has been renewed on March 22, 2021 and March 26, 2024. This EMTN program allows BNI to issue debt securities in stages with a maximum principal amount of US$2 billion.
The company completed the roadshow on March 26, 2024 and pricing on March 27, 2024. The bond interest rate was set at 5.28% per year, reflecting the level of investor confidence in BNI.
Novita further explained that since 2020, BNI has undergone a transformation that has resulted in an increase in Return on Equity (ROE) from 2.6% in 2020 to 15.2% in 2023. This shows a high jump in the company's profitability.
"BNI's fundamental transformation has increased ROE and reduced the cost of funds. BNI's capital adequacy level has also grown, as reflected in the core capital adequacy ratio or Tier-1 CAR which rose from 16% during the pandemic to 20% currently. This boosts investors confidence in BNI's strong fundamentals," Novita explained.
Novita stated that BNI's liquidity is now derived mostly from Third Party Funds (TPF) collection rather than securities issuance. Over the last three years, wholesale funding, including securities, has accounted for only 8%-9% of total liabilities.
The funds obtained from the issuance of these bonds will later be channeled for financing with an attractive margin level, thus having a positive impact on the company's profitability.