Launching of the first Asset-Backed Securities with a pool of retirement credits as its underlying assets. Total size: IDR 1.3 trillion (AAA).
PT Bahana TCW Investment Management and PT Bank Bukopin Tbk (BBKP) issued an Asset-Backed Securities (ABS) worth Rp 1.3 trillion, with a portfolio consisting of a collection of pension credit claims as of 29 August 2019.
"This is an alternative for investors looking for underlying portfolio diversification with consistent and higher returns than bonds with the same rating," said Edward Lubis, President Director of Bahana TCW, on Thursday (5/9/2019) in Jakarta.
According to Edward, the ABS, whose securities were issued by BBKP, was a portfolio investment comprised primarily of diverted state-employee credit retirement claims.
The redirected loans have a total principal amount of IDR 2.02 trillion plus interest, making this instrument a low-risk investment. "The ABS buys the credit for a maximum of Rp. 1.3 trillion with 155 percent underlying assets," he explained.
According to Edward, the financial flow from PT Taspen's pension benefits was used to pay the principal and coupon payments (Persero). "That's why it has a AAA rating, which confirms its low level of investment risk," he said.
The ABS is divided into two groups. Category A1 is a public offering with a three-year maturity date and a 9.25 percent coupon. Meanwhile, category A2 is a seven-year private placement product with a ten percent coupon rate.
"This ABS could appeal to a wide range of investors, including retail and institutional investors, pension funds, and corporations," Edward said.
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