Indonesia BTN mortgage-backed securities seen in ‘07
Indonesia’s first issue of residential mortgage-backed securities since the Asian financial crisis a decade ago is expected this year with a likely amount of 500 billion rupiah ($55.11 million), the sole arranger said on Friday.
The securities would be backed by the rights to collect housing loans extended by Indonesia’s leading housing bank, PT Bank Tabungan Negara (BTN), local financial firm PT and arranger Kiran Resources said.
“The programme will begin with due diligence on BTN and its housing loan portfolios,” Kiran president director Soebowo Musa said in a statement.
Another Kiran official said the structure of the deal, including the interest rate and the maturity, would be decided following due diligence expected to be conducted in coming months.
State-owned BTN has said it expected to offer 30 percent of its shares in an initial public offering (IPO) in 2007 to support its lending growth. It also said it might opt for a bond issuance to raise 1 trillion rupiah should the IPO plan not come through.
The move to issue mortgage-backed securities comes amid a lack of alternative investment instruments in the country’s financial markets and follows a World Bank report released earlier this month urging Jakarta to do more to boost its financial sector to help boost Southeast Asia’s biggest economy. ($1=9073 rupiah)