Investors are still wary of Indonesian credit stories. With this in mind, Bank Mandiri should receive praise for its careful and thoughtful approach to the bond markets. It realized early on that to get the markets comfortable with its name and so allow it greater access to capital it was going to have to take the process slowly and step by step. Its success should make it easier for other Indonesian borrowers. As one banker says: "Other Indonesians want to enter the market and the likes of Mandiri are opening things up and making it very possible for this to happen. In the long term this is not only positive for Indonesia but also Asia as a whole." In addition, the bank is seen as a strong proxy for the government. And in the government's absence Bank Mandiri is viewed as the best way of gaining exposure to the country.
A compelling story Mandiri has come to the market three times since the Asian crisis, twice in the past 12 months. And each time it has come, its story has becoming more compelling and investors more trusting as it heads closer to its promised IPO.
In August the bank completed its $125 million lower tier 2 debt issue.