Indonesia's national carrier, Garuda Indonesia, issued a IDR 2 trillion Asset-Backed Securities (KIK-EBA), with ticket sale from Umrah as underlying.
PT Garuda Indonesia (Persero) Tbk, Indonesia's state-owned airline, issued and listed the IDR 2 trillion GIAA01 Asset-Backed Collective Investment Contract (ABS) product today (31/7). This morning, the Indonesia Stock Exchange (IDX) welcomed the formal issuance.
The ABS is divided into two groups: A and B. ABS GIAA01 class A is now available to strategic investors after being listed on the IDX. Pefindo assigned an AA+ rating to this class A, which has a value of Rp 1.8 trillion and a yield of 9.75 percent pa, a 5-year tenor, and a maturity date of July 27, 2023.
ABS GIAA01 class B, on the other hand, was sold in a limited offering for IDR 200 billion over the same tenor and with a variable rate of return.
"This action is one of the alternative finance methods to address the company's financial needs," SOE Minister Rini Soemarno said in a statement issued on Tuesday (31/7). Rini anticipates that more SOEs will follow Garuda's lead and look for alternative funding sources.
She also anticipates that the private sector will follow suit in terms of innovation.
"A number of SOEs have successfully issued securitizations, receiving positive investor feedback." As a result, the government will continue to encourage more SOEs to participate, as well as encourage SOEs to expand their wings in the future with adequate funding and support, making SOEs stronger and growing," Rini said.
Garuda Indonesia's President Director, Pahala Nugraha Mansury, previously stated that the proceeds from the KIK EBA issuance would be used to refinance the company's debt. The majority of the company's debts are currently short-term, with maturities ranging from one to two years.
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