Rumors continue to circulate in Jakarta and elsewhere in Asia
that securitization bankers are eyeing onshore deals in Indonesia again, with ABS pros and bad debt buyers seen conspiring in the city's posh hotels.
Several distressed asset buyers have turned their attention to the country, as the opportunities dry up in South Korea and elsewhere and the Asian recovery looks like it may lift Indonesia out of the doldrums. Lehman Brothers, for example, recently confirmed that it has been purchasing distressed assets, with a future securitization a possibility (ASRI 8/14/2000 p. 1).
It also looks possible that the Indonesian Bank Restructuring Agency, the local bad debt agency, may turn to securitization. A key IBRA official, Amir Sambodo, is certainly pushing for securitization to be used to dispose of assets, raise cash and help IBRA - and Indonesia - meet its commitments to the International Monetary Fund.
Amir is an advisor to Cacuk Sudarijanto, IBRA's chairman and the new minister for national economic reconstruction. He has argued that IBRA should securitize non-performing loans combined with strong assets as credit enhancement. The bonds would then be rated by a local agency and issued in the local market.
"If they perform well, the price of these bonds will rise and we hope that international investors will also participate in the market," Amir said.
IBRA - considered by experts to be one of the worst performing of Asia's post-crisis restructuring bodies, all be it the one with the hardest job - may be helped in its ambitions by the recent signing of a memorandum of understanding with the Korean Asset Management Corp., the equivalent body in South Korea. The bodies will together examine how best to dispose of IBRA's assets, and another IBRA official said that securitization was one option discussed.
"Korea uses securitization to sell their loans or uses credit enhancement techniques where you improve the price of the asset by adding credit to it," said Eri Reksoprodjo, head of investor relations at IBRA, adding that IBRA should be similarly innovative in packaging its assets.
Kamco's prestige is high at present as it has recently closed a well-received cross-border securitization arranged by UBS Warburg and Deutsche Bank and worth $367 million. It has also closed several domestic ABS deals and sold large amounts of assets to Western buyers in a series of auctions.
Nonetheless, some Asian bankers were skeptical. "You have to wonder how serious IBRA are - are they saying all this because the IMF are in town and they have to make it look like they are making serious efforts?" asked one banker in Hong Kong. "Indonesia is not Korea and IBRA is not Kamco."