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Allen & Overy advises on the first Basel III-compliant Tier 2 bond from Indonesia

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Ginting Daniel
Daniel Ginting

Managing Partner, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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Tan Aloysius
Aloysius Tan

Partner

Singapore

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Husayn Reza

Senior Associate

Singapore

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Mohammad Andrew
Andrew Mohammad

Senior Associate, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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Hardianto Tyas
Tyas Hardianto

Associate, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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Mirpuri Madhu
Madhu Mirpuri

Marketing and Communications Manager

Hong Kong

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11 February 2020

Allen & Overy has advised PT Bank Tabungan Negara (Perero) Tbk. (the Issuer) on the issuance of USD300,000,000 4.20 per cent Tier 2 capital securities due 2025 (the Securities). This was the first Basel III-compliant Tier 2 bond issued by an Indonesian bank.
Coins lined up

The Issuer is one of four state-owned banks and is Indonesia’s largest mortgage provider with over 70 years of operational track record. The Securities are rated Ba3 by Moody’s and is listed on the Singapore Stock Exchange Securities Trading Limited. The issuance attracted strong investor demand and the order book was 12.3 times oversubscribed.

Partner Daniel Ginting from Ginting & Reksodiputro in association with Allen & Overy commented: “This marks the first offshore international Basel III-compliant Tier 2 bond from Indonesia. We expect that this deal will set the precedent and benchmark documentation for other Indonesian banks looking to raise Basel III-compliant Tier 2 capital from the international markets.”

Partner Aloysius Tan at Allen & Overy added: “International fundraising via the debt capital markets for Indonesian financial institutions and corporates continues to develop and grow in maturity at an incredible pace. We are delighted to be playing a prominent role in this journey by bringing together our expertise across both English and Indonesian law to support this landmark transaction.”

The team was led by Daniel Ginting in Jakarta and Aloysius Tan in Singapore, with support from senior associates Husayn Reza and Mohammad Andrew, associate Tyas Hardianto, and trainees Lee Youn Kyung and Ruby Avison.

The issuance of the Securities was jointly managed by Citigroup Global Markets Limited, The Hongkong and Shanghai Banking Corporation Limited, and Standard Chartered Bank.