important notice not for distribution to any person or address in the united states.

351 Pages·2013·2.33 MB·English

IMPORTANT NOTICE
NOT FOR DISTRIBUTION TO ANY PERSON OR ADDRESS IN THE
UNITED STATES.
IMPORTANT: You must read the following before continuing. The following applies to the offering
circular following this page (the “Offering Circular”), and you are therefore advised to read this
carefully before reading, accessing or making any other use of the Offering Circular. In accessing the
Offering Circular, you agree to be bound by the following terms and conditions, including any
modifications to them any time you receive any information from us as a result of such access.
NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF SECURITIES
FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS
UNLAWFUL TO DO SO. THE SECURITIES HAVE NOT BEEN, AND WILL NOT BE,
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“US SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR OTHER JURISDICTION, AND THE SECURITIES MAY NOT BE OFFERED, SOLD,
RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, WITHIN THE UNITED
STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH ANY
APPLICABLE STATE OR LOCAL SECURITIES LAWS.
THE FOLLOWING OFFERING CIRCULAR MAY NOT BE FORWARDED OR DISTRIBUTED TO
ANY OTHER PERSON AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER,
AND IN PARTICULAR, MAY NOT BE FORWARDED TO ANY US ADDRESS. ANY
FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN
PART IS UNAUTHORISED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A
VIOLATION OF THE US SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER
JURISDICTIONS. ANY INVESTMENT DECISION SHOULD BE MADE ON THE BASIS OF THE
FINAL TERMS AND CONDITIONS OF THE SECURITIES AND THE INFORMATION CONTAINED
IN A FINAL OFFERING CIRCULAR THAT WILL BE DISTRIBUTED TO YOU ON OR PRIOR TO
THE CLOSING DATE AND NOT ON THE BASIS OF THE ATTACHED OFFERING CIRCULAR. IF
YOU HAVE GAINED ACCESS TO THIS TRANSMISSION CONTRARY TO ANY OF THE
FOREGOING RESTRICTIONS, YOU ARE NOT AUTHORISED AND WILL NOT BE ABLE TO
PURCHASE ANY OF THE SECURITIES DESCRIBED THEREIN.
Confirmation of Your Representation: You have accessed the attached Offering Circular on the basis
that you have confirmed your representation to Citigroup Global Markets Limited and Standard
Chartered Bank (together, the “Joint Lead Managers”) and PT Bahana Securities (the “Co-Manager”
and, together with the Joint Lead Managers, the “Managers”) and PT Bank Rakyat Indonesia (Persero)
Tbk. (“BRI”) that (1) you are outside the United States, the electronic mail address that you provided
and to BRI and to which this electronic mail has been delivered is not located in the United States and,
to the extent you purchase the securities described in the attached Offering Circular, you will be doing
so pursuant to Regulation S under the US Securities Act, and (2) that you consent to delivery of the
attached Offering Circular and any amendments or supplements thereto by electronic transmission.
You are reminded that the Offering Circular has been delivered to you on the basis that you are a
person into whose possession the Offering Circular may be lawfully delivered in accordance with the
laws of the jurisdiction in which you are located and you may not, nor are you authorised to, deliver
the Offering Circular to any other person. If you have gained access to this transmission contrary to the
foregoing restrictions, you will be unable to purchase any of the securities described therein.
The materials relating to the offering of securities to which the Offering Circular relates do not
constitute, and may not be used in connection with, an offer or solicitation in any place where such
offer or solicitation is not permitted by law. If a jurisdiction requires that the offering be made by a
licensed broker or dealer and the Managers or any affiliate of the Managers is a licensed broker or
dealer in that jurisdiction, the offering shall be deemed to be made by the Managers or such affiliate on
behalf of the BRI in such jurisdiction.
Actions that You May Not Take: You should not reply by email to this announcement, and you may
not purchase any securities by doing so. Any reply email communications, including those that you
generate by using the “Reply” function on your email software, will be ignored or rejected.
The Offering Circular has been sent to you in an electronic form. You are reminded that documents
transmitted via this medium may be altered or changed during the process of electronic transmission
and consequently none of the Managers, BRI or any of their respective affiliates accepts any liability
or responsibility whatsoever in respect of any such alteration or change to the Offering Circular
distributed to you in electronic format.
You are responsible for protecting against viruses and other destructive items. Your use of this
e-mail is at your own risk and it is your responsibility to take precautions to ensure that it is free from
viruses and other items of a destructive nature.
CONFIDENTIAL
PT Bank Rakyat Indonesia (Persero) Tbk
(incorporatedwithlimitedliabilityintheRepublicofIndonesia)
US$500,000,000 2.95 per cent. notes due 28 March 2018
Issueprice:99.196percent.
The US$500,000,000 2.95 per cent. senior unsecured fixed rate notes due 28 March 2018 (the
“Notes”) are issued by PT Bank Rakyat Indonesia (Persero) Tbk (the “Issuer”, “BRI” or the “Bank”).
The Notes will bear interest at the rate of 2.95 per cent per annum payable semi-annually in arrear on
28 September and 28 March in each year, commencing on 28 September 2013. Payments on the Notes
will be made without deduction for or of account of taxes of the Republic of Indonesia (“Indonesia”).
See “Terms and conditions of the Notes — Taxation”.
Unless previously redeemed, the Notes will be redeemed on 28 March 2018 (the “Maturity Date”)
at their principal amount outstanding as at the Maturity Date. The Notes are subject to redemption, in
whole but not in part, at their then outstanding principal amount, together with accrued and unpaid
interest, if any, at the option of the Issuer at any time in the event of certain changes affecting taxes of
Indonesia. See “Terms and conditions of the Notes — Redemption and purchase — Redemption for
taxation reasons”.
The Notes will be issued in registered form in minimum denominations of US$200,000 each and
integral multiples of US$1,000 thereafter. The Notes will each be represented by beneficial interests in
a global registered note certificate (the “Global Certificate”) which will be registered in the name of a
nominee of a common depositary for Euroclear Bank S.A./N.V., as operator of the Euroclear System
(“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream, Luxembourg”). It is
expected that delivery of the Global Certificate will be made on 28 March 2013 or such later date as
may be agreed (the “Closing Date”) by the Issuer and Citigroup Global Markets Limited and Standard
Chartered Bank (together, the “Joint Bookrunners” or “Joint Lead Managers”) and PT Bahana
Securities (the “Co-Manager” and, together with the Joint Lead Managers, the “Managers”).
Beneficial interests in the Global Certificate will be shown on, and transfers thereof will be effected
only through, accounts at Euroclear and Clearstream, Luxembourg. Except as described herein,
individual note certificates for Notes will not be issued in exchange for beneficial interests in the
Global Certificate. See “Terms and conditions of the Notes — Transfers of Notes and issue of
certificates”.
Approval-in-principle has been received from the Singapore Exchange Securities Trading Limited
(the “SGX-ST”) for listing of, and quotation for, the Notes on the SGX-ST. The SGX-ST assumes no
responsibility for the correctness of any of the statements made or opinions expressed or reports
contained in this offering circular. Admission to the Official List of the SGX-ST and quotation of the
Notes on the SGX-ST is not to be taken as an indication of the merits of the Issuer or the Notes.
The Notes have not been and will not be registered under the United States Securities Act of 1933,
as amended (the “US Securities Act”) or the securities laws of any jurisdiction. The Notes may not be
offered, sold, resold, transferred or delivered, directly or indirectly, within the United States, except
pursuant to an applicable exemption from, or in a transaction not subject to, the registration
requirements of the US Securities Act. The Notes are being offered only outside the United States in
reliance on Regulation S under the US Securities Act (“Regulation S”). For a description of certain
restrictions on the resale or transfer of the Notes and the distribution of this offering circular, see
“Subscription and sale”.
Investing in the Notes involves certain risks. See “Risk factors” beginning on page 17.
The Issuer expects that the Notes will on issue be ascribed a credit rating of “Baa3” by Moody’s
Investors Service, Inc. (“Moody’s”) and “BBB-” by Fitch Ratings Ltd. (“Fitch”). The rating ascribed
to the Notes reflects only the views of Moody’s and Fitch. A credit rating is not a recommendation to
buy, sell or hold Notes and may be subject to revision, suspension or withdrawal at any time by
Moody’s and Fitch. A suspension, reduction or withdrawal of the rating assigned to the Notes may
adversely affect the market price of the Notes.
Joint Lead Managers and Joint Bookrunners
Citigroup Standard Chartered Bank
Co-Manager
PT Bahana Securities
The date of this offering circular is 21 March 2013
TABLE OF CONTENTS
NOTICETOINVESTORS ................................................................ ii
SUMMARY ........................................................................... 1
SUMMARYOFTHEOFFERING .......................................................... 7
SELECTEDFINANCIALINFORMATIONANDOPERATINGDATA ........................... 10
RISKFACTORS ........................................................................ 17
TERMSANDCONDITIONSOFTHENOTES ............................................... 34
THEGLOBALCERTIFICATE ............................................................ 50
EXCHANGERATESANDEXCHANGECONTROLS......................................... 53
USEOFPROCEEDS .................................................................... 54
CAPITALISATION ..................................................................... 55
OVERVIEWOFTHEINDONESIANBANKINGINDUSTRY................................... 56
BUSINESS ............................................................................ 64
RISKMANAGEMENTANDCOMPLIANCE ................................................ 94
SUPERVISIONANDREGULATION....................................................... 103
MANAGEMENT ....................................................................... 123
RELATIONSHIPWITHTHEGOVERNMENTANDRELATEDPARTYTRANSACTIONS .......... 132
SHAREHOLDERS ...................................................................... 135
TAXATION ........................................................................... 136
SUBSCRIPTIONANDSALE ............................................................. 139
GENERALINFORMATION .............................................................. 144
INDEXTOFINANCIALINFORMATION................................................... F-1
IN CONNECTION WITH THE ISSUE OF THE NOTES, THE JOINT LEAD MANAGERS,
EACH AS STABILISING MANAGER (THE “STABILISING MANAGER”) (OR PERSONS
ACTING ON BEHALF OF THE STABILISING MANAGER) MAY OVERALLOT NOTES OR
EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE
NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL.
HOWEVER, THERE IS NO ASSURANCE THAT THE STABILISING MANAGER (OR
PERSONS ACTING ON BEHALF OF THE STABILISING MANAGER) WILL UNDERTAKE
STABILISATION ACTION. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE
DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF
THE NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END
NO LATER THAN THE EARLIER OF 30 DAYS AFTER THE ISSUE DATE OF THE NOTES
AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE NOTES. ANY
STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE
STABILISING MANAGER (OR PERSONS ACTING ON BEHALF OF THE STABILISING
MANAGER) IN ACCORDANCE WITH APPLICABLE LAWS.
— i —
NOTICE TO INVESTORS
The Issuer, having made all reasonable enquiries, confirms that (i) this offering circular contains
all material information with respect to the Issuer and the Notes; (ii) all statements relating to the
Issuer and the Notes contained in this offering circular are in every material respect true and accurate
and not misleading, and that there are no other facts in relation to the Issuer or the Notes or the
omission of which would in the context of the issue of the Notes make any statement in this offering
circular misleading, (iii) the statements of intention, opinion, belief or expectation contained in this
offering circular are honestly made or held and have been reached after considering all relevant
circumstances and have been based on reasonable assumptions and (iv) all reasonable enquiries have
been made by the Issuer to ascertain such facts and to verify the accuracy of all such statements. The
Issuer accepts full responsibility for the accuracy of the information contained in this offering circular.
The distribution of this offering circular and the offering and sale of the Notes in certain
jurisdictions may be restricted by law. No representation is made by the Issuer or by the Managers that
this offering circular may be lawfully distributed or that the Notes may be lawfully offered in
compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant
to an exemption available thereunder, and none of them assumes responsibility for facilitating any such
distribution or offering or for a purchaser’s failure to comply with applicable laws and regulations. The
Issuer and the Managers require persons into whose possession this offering circular comes to inform
themselves about and to observe any such restrictions. This offering circular does not constitute an
offer of, or an invitation to purchase, the Notes in any jurisdiction in which such offer or sale would be
unlawful. No one has taken any action that would permit a public offering to occur in any jurisdiction.
For a description of certain restrictions on offers and sales of the Notes and distribution of this offering
circular, see “Subscription and sale”.
No person has been or is authorised to give any information or to make any representation
concerning the Issuer or the Notes other than as contained herein and, if given or made, any such other
information or representation should not be relied upon as having been authorised by the Issuer or the
Managers, the Trustee or the Agents (both as defined in the “Terms and conditions of the Notes”).
Neither the delivery of this offering circular nor any offering, sale or delivery made in connection with
the issue of the Notes shall, under any circumstances, constitute a representation that there has been no
change or development reasonably likely to involve a change in the affairs of the Issuer since the date
hereof or create any implication that the information contained herein is correct as at any date
subsequent to the date hereof.
Listing of the Notes on the SGX-ST is not to be taken as an indication of the merits of the Issuer
or the Notes. In making an investment decision, potential purchasers must rely on their own
examination of the Issuer and the terms of the offering of the Notes, including the merits and risks
involved. See “Risk factors” for a discussion of certain factors to be considered in connection with an
investment in the Notes. Each person receiving this offering circular acknowledges that such person
has not relied on the Managers or any person affiliated with the Managers in connection with its
investigation of the accuracy of such information or its investment decision.
No representation or warranty, express or implied, is made or given by the Managers, the Trustee
or the Agents as to the accuracy, completeness or sufficiency of the information contained in this
offering circular, and nothing contained in this offering circular is, or shall be relied upon as, a
promise, representation or warranty by the Managers, the Trustee or the Agents. The Managers have
not independently verified any of the information contained in this offering circular and can give no
assurance that this information is accurate, truthful or complete. This offering circular is not intended
to provide the basis of any credit or other evaluation, nor should it be considered as a recommendation
by the Issuer, the Managers, the Trustee or the Agents that any recipient of this offering circular should
— ii —
purchase the Notes. Each potential purchaser of the Notes should determine for itself the relevance of
the information contained in this offering circular and its purchase of the Notes should be based upon
such investigations with its own tax, legal and business advisers as it deems necessary.
To the fullest extent permitted by law, the Managers, the Trustee and the Agents do not accept any
responsibility for the contents of this offering circular. Each of the Managers, the Trustee and the
Agents accordingly disclaims all and any liability whether arising in tort or contract or otherwise
which it might otherwise have in respect of this offering circular or any such statement. None of the
Managers, the Trustee or the Agents undertakes to review the Issuer’s financial condition or affairs
after the date of this offering circular nor to advise any investor or potential investor in the Notes of
any information coming to the attention of the Managers, the Trustee or the Agents.
The Notes have not been and will not be registered under the US Securities Act or any United
States state securities laws and, unless so registered, may not be offered, sold or delivered within the
United States (as defined under Regulation S) except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the US Securities Act and applicable
United States state securities laws. The Notes are being offered only outside the United States in
compliance with Regulation S. Each purchaser of the Notes in making its purchase will be required to
make or will be deemed to have made certain acknowledgements, representations and agreements, as
set out in “Subscription and sale”.
The Notes have not been, and will not be, offered as a public offering in Indonesia under Law
No. 8 of 1995 regarding the Capital Markets. The Financial Services Authority (Otoritas Jasa
Keuangan, or “OJK”) does not review or declare its approval or disapproval of the issue of the Notes,
nor does it make any determination as to the accuracy or adequacy of this offering circular. Any
statement to the contrary is a violation of Indonesian law.
Each purchaser of the Notes must comply with all applicable laws and regulations in force in each
jurisdiction in which it purchases, offers or sells such Notes or possesses or distributes this offering
circular and must obtain any consent, approval or permission required by it for the purchase, offer or
sale by it of such Notes under the laws and regulations in force in any jurisdictions to which it is
subject or in which it makes such purchases, offers or sales and none of the Issuer, the Managers, the
Trustee or the Agents shall have any responsibility therefor.
Any purchase of the Notes is in all respects conditional on the satisfaction of certain conditions set
out in the Subscription Agreement (as defined in “Subscription and sale”) and the issue of the Notes by
the Issuer pursuant to the Subscription Agreement. Any offer, invitation to offer or agreement made in
connection with the purchase of the Notes or pursuant to this offering circular shall (without any
liability or responsibility on the part of the Issuer, the Managers, the Trustee or the Agents) lapse and
cease to have any effect if (for any reason whatsoever) the Notes are not issued by the Issuer pursuant
to the Subscription Agreement.
CONVENTIONS
Unless otherwise specified or the context requires, references in this offering circular to the
“Issuer”, “BRI” or the “Bank” are to PT Bank Rakyat Indonesia (Persero) Tbk (including, where the
context so requires, the Issuer and its subsidiary undertakings); references to “Singapore dollars”,
“SGD” and “S$” are to the lawful currency of Republic of Singapore; references to “US dollars”,
“US$” or “USD” are to the lawful currency of the United States of America; and references to
“Rupiah” and “Rp” are to the lawful currency of Indonesia; references to “Indonesia” are to the
— iii —
Republic of Indonesia; references to “€” or EUR are to the lawful currency introduced at the start of
the third stage of European economic and monetary union pursuant to the Treaty establishing the
European Community (signed in Rome on 25 March 1957), as amended; references to “Hong Kong
dollars”, “HKD” or “HK$” are to the lawful currency of the Hong Kong SAR; and references to the
“Government” are to the Government of the Republic of Indonesia.
MARKET DATA
Market data and certain industry forecasts used throughout this offering circular have been
obtained based on internal surveys, market research, publicly available information and industry
publications. Industry publications generally state that the information that they contain has been
obtained from sources believed to be reliable but that the accuracy and completeness of that
information is not guaranteed. Similarly, internal surveys, industry forecasts and market research,
while believed to be reliable, have not been independently verified. While the Issuer and the Managers
have taken reasonable actions to ensure that the information is extracted accurately and in its proper
context, neither the Issuer nor either Joint Lead Manager makes any representation as to the accuracy
and completeness of that information.
FINANCIAL DATA AND RATIOS
The consolidated financial statements of the Issuer as at and for the years ended 31 December
2010, 2011 and 2012 included elsewhere in this offering circular have been audited by Purwantono,
Suherman & Surja (the Indonesian member firm of Ernst & Young Global Limited), independent
auditors as stated in their report appearing herein. The report appearing herein states that Purwantono,
Suherman & Surja (the Indonesian member firm of Ernst & Young Global Limited) did not audit the
financial statements of the Issuer’s overseas branches whose combined total assets and net income
constituted 1.47 per cent. and 0.28 per cent. of the Issuer’s total assets and net income, respectively, as
at and for the year ended 31 December 2010. Those statements were audited by other independent
auditors who expressed an unqualified opinion. The consolidated financial statements were prepared in
accordance with Indonesian generally accepted accounting practices (Penyataan Standar Akuntansi
Keuangan, or “Indonesian Financial Accounting Standards”). For the basis of preparation of the
consolidated financial statements included in this offering circular and a summary of the accounting
policies implemented by the Issuer, please refer to note 2 of the consolidated financial statements.
Unless otherwise indicated, all financial information in this offering circular is presented on a
consolidated basis. With regard to certain financial ratios and figures, information is presented on a
standalone basis where the Bank believes such presentation is a more accurate reflection of its
underlying financial position and results of operations. For certain information concerning the Bank’s
subsidiaries, which are one of the five operating segments into which the Bank is organised for
management purposes, see note 40 of the consolidated financial statements included elsewhere in this
offering circular.
Certain financial ratios that are commonly used to analyse the banking industry in Indonesia are
presented in this offering circular. These financial ratios may be defined or calculated in different ways
by different issuers. Accordingly, set out below is the manner in which these ratios are defined and
presented in this offering circular, which potential purchasers of the Notes should be aware may differ
from the way other banks calculate these ratios:
Š capital adequacy ratio (“CAR”) is calculated pursuant to Bank Indonesia Regulation
No. 10/15/PBI/2008 dated 24 September 2008, and is the ratio of total capital consisting
— iv —
of core capital (Tier I) and supplementary capital (Tier II and Tier III) to total risk-
weighted assets for credit risk, operational risk and market risk at the end of the relevant
year;
Š loan to deposit ratio (“LDR”) on a standalone basis is calculated based on Bank Indonesia
regulation and is the ratio of total gross loans to total deposits from customers at the end
of the relevant year. LDR on a consolidated basis is calculated as the ratio of total gross
loans and sharia receivables and financing to total deposits from customers at the end of
the relevant year;
Š non-performing loans (“NPL”) gross ratio on a standalone basis is calculated as the ratio
of gross loans categorised as substandard, doubtful and loss under Bank Indonesia
regulations to total loans at the end of the relevant year. NPL gross ratio on a consolidated
basis is calculated as the ratio of gross loans and sharia receivables and financing
categorised as substandard, doubtful and loss under Bank Indonesia regulations to total
loans and sharia receivables and financing at the end of the relevant year;
Š NPL net ratio on a standalone basis is calculated as the ratio of total loans categorised as
substandard, doubtful and loss under Bank Indonesia regulations, net of allowance for
impairment losses, to total loans at the end of the relevant year. NPL net ratio on a
consolidated basis is calculated as the ratio of total loans and sharia receivables and
financing categorised as substandard, doubtful and loss under Bank Indonesia regulations,
net of allowance for impairment losses, to total loans and sharia receivables and financing
at the end of the relevant year;
Š NPL coverage ratio is calculated as the ratio of allowance for impairment losses on loans
and sharia financing and receivables to total gross non-performing loans and sharia
financing and receivables at the end of the relevant year;
Š return on assets (“ROA”) is the ratio of income before tax for the relevant year divided by
average total assets (with the average calculated based on the beginning and closing
balances of the respective year);
Š return on equity (“ROE”) is the ratio of income for the relevant year divided by average
total core capital (with the average calculated based on the beginning and closing balances
of the respective year); and
Š net interest margin (“NIM”) is the ratio of net interest income for the year to average
earning assets (with the average calculated based on the beginning and closing balances of
the respective year). Net interest income is the difference between the total interest
income and total interest expense. Earning assets, for the purpose of calculating NIM,
consist of current accounts with other banks, placements with Bank Indonesia and other
banks, securities, export bills, Government recapitalisation bonds, securities purchased
under agreement to resell, derivatives receivable, loans, acceptances receivable and
investment in associated entities and excluding commitments and contingencies. Please
note that the definition of earning assets in this section applies only to NIM and does not
apply to any other ratios appearing herein.
In this offering circular, where information has been presented in thousands of units or more,
amounts may have been rounded up or down. Accordingly, totals of columns or rows of numbers
in tables may not be equal to the apparent total of the individual items and actual numbers may
differ from those contained herein due to rounding. References to information in billions of units
are to the equivalent of a thousand million units.
— v —
EXCHANGE RATES
For convenience, certain Rupiah amounts have been translated into US dollar amounts, based on
the exchange rate on 31 December 2012 of Rp9,637= US$1.00, which is the middle exchange rate
based on Bank Indonesia’s published buying and selling rates on that date for Rupiah against
US dollars. Such translations should not be construed as representations that the Rupiah or US dollar
amounts referred to could have been, or could be, converted into Rupiah or US dollars, as the case may
be, at that or any other rate or at all. See “Exchange rates and exchange controls” for further
information regarding rates of exchange between Rupiah and US dollars.
FORWARD-LOOKING STATEMENTS
This offering circular contains “forward-looking statements” and information that is based on
management’s current expectations, assumptions, estimates and projections about the Issuer and its
industry and information currently available to it. These forward-looking statements are identified by
their use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”,
“may”, “plan”, “objectives”, “outlook”, “probably”, “project”, “will”, “seek”, “target” and similar
terms and phrases and reflect management’s current views with respect to future events and are subject
to certain risks, uncertainties and assumptions. The Bank’s actual results may vary materially from
those described in this document.
These forward-looking statements include, among others, statements concerning:
Š the Bank’s retail, consumer and corporate banking services business, its advantages and
its strategy for continuing to pursue its business;
Š anticipated development and the launch of new services in the Bank’s business;
Š anticipated dates on which the Issuer will begin providing certain services or reach
specific milestones in the development and implementation of its business strategy;
Š growth and recovery of the retail, consumer and corporate banking services industry;
Š expectations as to the Bank’s future revenue, margins, expenses and capital requirements;
and
Š other statements of expectations, beliefs, future plans and strategies, anticipated
developments, use of proceeds and other matters that are not historical facts.
These forward-looking statements are subject to risks and uncertainties, including financial,
regulatory, environmental, industry growth and trend projections, that could cause actual events or
results to differ materially from those expressed or implied by the statements. The most important
factors that could prevent the Bank from achieving its stated goals include, but are not limited to,
failure to:
Š continue to grow its loan portfolio;
Š develop new services that meet customer demands and generate acceptable margins, such
as microbanking and e-banking capabilities;
— vi —
Š prevent fraud and other breaches of information technology security;
Š integrate strategic acquisitions and joint ventures with other financial institutions;
Š attract and retain qualified management and other personnel; and
Š meet all of the terms and conditions of its debt obligations and other contractual
obligations.
Neither the Bank nor any other person undertakes any obligation to update any forward-looking
statements, whether as a result of new information, future events or otherwise. For further information
regarding the risks and uncertainties that may affect the Bank’s future results, see “Risk factors”.
Potential investors are cautioned not to place undue reliance on these forward-looking statements,
which reflect management’s perception and analysis only as at the date of this offering circular.
ENFORCEABILITY OF FOREIGN JUDGMENTS IN INDONESIA
The Notes and the agreements entered into with respect to the issue of the Notes are governed by
the laws of England. The Issuer is incorporated under the laws of Indonesia and all of the Issuer’s
commissioners (“Commissioners”) and all of the Issuer’s directors (“Directors”) reside in Indonesia.
Substantially all of the Issuer’s assets and the assets of such persons are located in Indonesia. As a
result, it may be difficult for holders of the Notes (“Noteholders”) to effect service of process outside
of Indonesia upon the Issuer or such persons or to enforce against the Issuer judgments obtained in
courts outside Indonesia. The Issuer has been advised by its Indonesian legal adviser that judgments of
courts outside Indonesia are not enforceable in Indonesian courts and, as a result, it may not be
possible to enforce judgments obtained in non-Indonesian courts against the Issuer. A foreign court
judgment could be offered and accepted into evidence in a proceeding on the underlying claim in an
Indonesian court and may be given such evidentiary weight as the Indonesian court may deem
appropriate in its sole discretion. As a result, the Noteholders may be required to pursue claims related
to the Notes in Indonesian courts under Indonesian law. Re-examination of the underlying claim before
an Indonesian court may be required. There can be no assurance that the claims or remedies available
under Indonesian law will be the same, or as extensive as those available in other jurisdictions.
INDONESIAN REGULATION OF OFFSHORE BORROWINGS
Bank Indonesia Regulation No. 7/1/PBI/2005 on Offshore Borrowings for Banks, dated 10 January
2005 (as amended by Bank Indonesia Regulation No. 10/20/PBI/2008, dated 14 October 2008 and Bank
Indonesia Regulation No. 13/7/PBI/2011, dated 28 January 2011) (“PBI No. 7/1/PBI/2005”) and Bank
Indonesia Circular Letter No. 9/1/DInt, dated 15 February 2007 (as amended by Bank Indonesia
Circular Letter No. 10/32/DInt dated 14 October 2008) stipulate that an Indonesian bank that intends to
obtain long-term offshore borrowing must obtain approval from Bank Indonesia. The application for
approval must be submitted to Bank Indonesia at least one month before the proposed long-term
offshore borrowing.
Bank Indonesia has granted its approval for the issuance of the Notes by the Issuer in Letter
No. 15/43/DInt, dated 7 March 2013. After the issuance of the Notes, the Issuer must submit periodic
reports to Bank Indonesia in the manner set out below.
— vii —
Bank Indonesia Regulation No. 12/24/PBI/2010 on Reporting Obligations for Offshore
Borrowings, dated 29 December 2010 (“PBI No. 12/24/PBI/2010”) and Bank Indonesia Circular Letter
No. 13/1/DInt dated 20 January 2011 stipulate that any person, legal or other entity domiciled in
Indonesia, or planning to be domiciled in Indonesia for at least one year, that obtains offshore
commercial borrowings or issues debt securities must submit reports to Bank Indonesia. These reports
consist of the main data report and the monthly realisation data report. The main data report must be
submitted to Bank Indonesia no later than the tenth day of the month following the month in which the
loan agreement is signed or the debt securities are issued. A monthly realisation data report must be
submitted to Bank Indonesia between the first and the tenth day of each month until the offshore
commercial borrowing has been repaid in full. The reporting obligation under PBI 12/24/PBI/2010
effectively will be revoked by Bank Indonesia Regulation No. 14/21/PBI/2012 on the Reporting of
Foreign Exchange Traffic Activities (“PBI 14/21/PBI/2012”) on 1 August 2013. Under
PBI 14/21/PBI/2012, reports on foreign exchange activities must be submitted on a monthly basis, by
no later than the fifteenth day of the following month to Bank Indonesia. Sanctions for failure to
submit a foreign exchange traffic report in the form of offshore borrowing realisation under
PBI 14/21/PBI/2012 will take effect starting in respect of the January 2014 report to be submitted in
February 2014.
Under Bank Indonesia Regulation No. 13/21/PBI/2011 concerning the “Monitoring of Foreign
Exchange Activities of Bank” issued in 30 September 2011, the foreign exchange reports which must
be reported by banks include a “transaction report” which covers bank and customer transactions which
affect offshore financial liabilities and assets of the relevant bank and a “position report” which covers
position and mutation of each account on the offshore financial liabilities and asset of the relevant
bank. Banks must submit foreign exchange reports under PBI No. 13/21/PBI/2011 by no later than the
fifteenth day of the following month to Bank Indonesia.
Under Bank Indonesia Regulation No. 14/21/PBI/2012, an Indonesian bank must submit a report
with respect to its offshore loan realisation to Bank Indonesia. For other foreign exchange reporting
obligations, an Indonesian bank is subject to relevant Bank Indonesia regulation on monitoring of
foreign exchange activities and offshore borrowings. Under Bank Indonesia Regulation
No. 14/21/PBI/2012, reports on foreign exchange activities must be submitted to Bank Indonesia on a
monthly basis, by no later than the fifteenth day of the following month.
LANGUAGE OF TRANSACTION DOCUMENTS
Pursuant to Law No. 24 of 2009, regarding Flag, Language, Coat of Arms and National Anthem
enacted on 9 July 2009 (“Law No. 24”), agreements to which Indonesian entities are a party are
required to be executed in Bahasa Indonesia, although dual language documents are permitted when a
foreign entity is a party. The Issuer will execute the English versions of all transaction agreements and
subsequently the Bahasa Indonesia versions of all transaction agreements to which it is a party. All of
these documents will provide that in the event of a discrepancy or inconsistency, the parties intend that
the English version would prevail. There exists substantial uncertainty regarding how Law No. 24 will
be interpreted and applied, and to date, no implementing regulations have been issued. See
“Risk factors — Risks relating to Indonesia”. The Indonesian Ministry of Law and Human Rights has
issued clarification letter No. M.HH.UM 01-01-35 dated 28 December 2009 to clarify that the
implementation of Law No. 24 is contingent upon the enactment of a Presidential Regulation and until
such a Presidential Regulation is enacted, any agreement that is executed prior to the enactment of the
Presidential Regulation in English without a Bahasa Indonesia version is still legal and valid, and shall
not violate Law No. 24. However, no assurance can be given that an Indonesian court would permit the
English version to prevail or even consider the English version.
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