BTN Launches Rp2.3 Trillion Bond Issuance to Boost Capital and Mortgage Financing

Dual Bond Instruments for Different Purposes

PT Bank Tabungan Negara (Persero) Tbk. (BBTN) has announced the issuance of two bond instruments totaling Rp2.3 trillion as part of its Continuous Public Offering (PUB) program, which has a total target of Rp15 trillion. The bonds are designed to strengthen the bank's capital structure while supporting its core mission of housing finance.

Social Bonds for Affordable Housing

The first instrument is the Sustainable Social Awareness Bond I Phase I/2025 worth Rp300 billion. This bond carries a fixed interest rate of 5.30% per annum with a three-year tenor, maturing on December 12, 2028. The funds raised will be allocated to finance or refinance social projects, including affordable basic infrastructure, people's housing, job creation, and MSME financing. The bond has been rated idAAA by Pefindo, indicating an extremely low-risk profile.

Subordinated Bonds for Capital Enhancement

The second instrument is the Continuous Subordinated Bonds I Phase I/2025 worth Rp2 trillion. These bonds have a fixed coupon rate of 6.65% per annum and a five-year tenor, maturing on December 12, 2030. The proceeds will be used to strengthen BTN's capital structure as Tier-2 capital. This move is part of the bank's strategy to maintain capital adequacy ratios while expanding its credit portfolio, particularly in the housing loan segment. The subordinated bonds have been rated idAA by Pefindo, reflecting high quality but with moderate risk compared to senior bonds.

Key Features and Investor Considerations

1. Social Bond Allocation: 80-100% for new financing projects, with a maximum of 20% for refinancing. Annual reporting to OJK is mandatory.
2. Subordinated Bond Risk: These bonds carry additional risk due to their subordinated nature and potential write-down if BTN reaches a non-viability point as per OJK regulations.
3. Coupon Payment Schedule: Quarterly payments for both bond types.

Market Impact and Strategic Significance

The dual bond issuance is part of BTN's broader strategy to build a more sustainable funding base while fulfilling its mandate as a state-owned bank focused on housing finance. The social bonds will support the pipeline of affordable housing projects, while the subordinated bonds will strengthen the bank's capital to expand both subsidized and non-subsidized mortgage lending.

BTN has appointed four underwriters for this issuance: PT CIMB Niaga Sekuritas, PT BCA Sekuritas, PT Indo Premier Sekuritas, and PT Mandiri Sekuritas. The public offering will take place on December 8-9, 2025, with listing on the Indonesia Stock Exchange scheduled for December 15, 2025.