Indonesia's Bank Danamon Cancels Plan to Issue Bonds

JAKARTA, July 17 Asia Pulse - PT Bank Danamon Indonesia (JSE:BDMN) said it has decided to cancel plans to issue bonds this year due to interest rate rises and economic condition which are not conducive to robust demand for bonds.

The bank, which is owned by Asia Financial Holding, a subsidiary of Temasek Group, planned earlier to issue bonds valued at 2.25 trillion (US$244.3 million) this year.

The bond market is no longer conducive after two successive rises in Bank Indonesia's benchmark interest rate to 8.75 per cent from 8.25 per cent in May, Danamon President Sebastian Paredes told he newspaper Investor Daily yesterday.

The bank may consider issuing bonds next year if the market is more favorable, Paredes said.

He said the bank has no plan for joining in syndicated loans, acquisition or seeking additional capital, adding that the bank has grown significantly without such measures.

He predicted, however that credit expansion in the second half of this year will be slow because of inflationary pressure, a rise in interest rates and fuel price hikes.

(ANTARA)

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