Japanese lender Jaccs issues medium-term notes to expand business in Indonesia

Johny Kandano (C), CEO of PT Mitra Pinasthika Mustika Finance, an Indonesian subsidiary of Japanese financial service firm Jaccs Co., poses with Eric Nemitz (L), CEO of PT Sompo Insurance Indonesia, a local unit of major Japanese non-life insurer Sompo Japan Nipponkoa Insurance Inc., and Geger Nuryaman Maulana, managing director of local brokerage PT BNI Sekuritas, at a signing ceremony for the issuance of medium-term notes in Jakarta on Aug. 9.

JAKARTA, NNA – PT Mitra Pinasthika Mustika Finance, an Indonesian subsidiary of Japanese financial service firm Jaccs Co., has issued medium-term notes of 300 billion rupiah ($21 million) to expand loan businesses in Southeast Asia’s largest automotive and motorcycle markets.

The local unit raised 150 billion rupiah each in July and early this month via private placements to major Japanese non-life insurer Sompo Japan Nipponkoa Insurance Inc., Johny Kandano, CEO of the local arm, said Friday at a signing ceremony in Jakarta.

For the latest fundraising, the subsidiary known as MPM Finance appointed PT BNI Sekuritas as arranger. The bond maturity period is three years, he said. The notes’ coupon rates were not disclosed.

As part of its efforts to diversify sources of financing, MPM Finance took out a syndicated loan of $250 million from 20 Japanese and foreign financial institutions in May to meet financing demand from vehicle purchasers and corporate clients in Indonesia, he said.

The local unit issued private placement bonds with the same value and tenures to the Japanese non-life insurer in 2016 and repaid them in March and April this year, the CEO told NNA, adding, “We can take another debt as we are growing.”

“This is our second partnership. We committed to continue and support MPM Finance,” CEO Eric Nemitz of PT Sompo Insurance Indonesia, the local arm of the Tokyo-based firm, told NNA.

In 2018, MPM Finance financed a total of 7.2 trillion rupiah, consisting of 5.5 trillion rupiah for automobile and motorcycle purchases and 1.7 trillion rupiah for capital goods leasing, Nemitz said.

This year, the local unit targets to finance 6.9 trillion rupiah. In the first six months, the total loan amount reached 3.1 trillion rupiah, with loans for vehicles accounting for 2.2 trillion rupiah, according to the company.

“2019 is full of challenges, including automotive sales which have dropped in certain regions and been affected by political conditions during the election period” in April, Kandano said.

“For this reason, the company plans to diversify its business fields, not only to focus on automotive but also to boost financing in the corporate segment,” he added.

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