JAKARTA: PT Bank Central Asia Tbk shall issue IDR2 trillion subordinated bonds in the second half of 2011.We plan to sell IDR2 trillion subdebt in the third or fourth quarter this year, said Vice President Director of BCA, Jahja Setiaatmadja yesterday.This subdebt issuance aims to strengthen the lenders capital and realize up to 25% credit expansion. If our credit grows vigorously then we shall issue this particular subdebt. Yet, if it only grows by 20%-22%, possibly we will not issue it this year.Referring to the given regulation, 50% of the subdebt value may be included in the companys second tier capital.We will first observe our CAR, if it declines rapidly, the subdebt issuance shall take place faster. We will make our final decision upon this matter in the third quarter, said Jahja.The capital market condition also becomes particular consideration for kicking the corporate action. We expect the yield to go below 10%. Thus, if the capital market is relatively modest, we shall postpone it to next year. We are not in a rush as the CAR is still around 15%.Adding to that, Jahja emphasized that the Indonesias third largest lender by asset will still rely on consumer credit to boost this years credit growth.Regarding to consumer loans, particularly mortgage and automotive financing, it may soar to 30% compared to last year.This bonds issuance can be considered as the historical momentum since BCA is considered as one of banks with no record for having bonds. Based on the financial statement as per 31 March 2011, BCA had no bonds record.Particularly mortgage facility, BCA employs fixed rate for three years at 9.75% and not more than 10% for the two years after. Yesterday, the BBCA-coded stock climbed by 0.68% or IDR50 to IDR7,350, leaving the market capitalization at IDR181.21 trillion or the largest in banking industry. (T02/NOM)
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