Mandiri set to raise $1.3 bln in rights

* Mandiri set to raise 11.7 trln rph-term sheet

* Mandiri set rights price indication at 5,000 rph/share

* Placement on govt portion set at 5,150-5,200 rph/share

* Set to be Indonesia's second-biggest rights issue 

PT Bank Mandiri (BMRI.JK), Indonesia's biggest lender, was set to raise 11.69 trillion rupiah ($1.3 billion) in a rights issue, set to be Indonesia's second-biggest rights offering, based on the term sheet obtained by Reuters on Monday.

The rights issue price indication of 5,000 rupiah per share, just below the mid point of the previously indicated 4,000 to 6,150 rupiah range, is a 9.1 percent discount to Mandiri's close on Monday of 5,500 rupiah.

The state-owned bank's capital raising will be the second biggest rights issue in Indonesian after PT Bakrie and Brothers (BNBR.JK) raised about 40 trillion rupiah in 2008.

However, it becomes the nation's biggest rights offering by a bank, beating an issue of Bank Negara Indonesia (BBNI.JK) which raised 10.46 trillion rupiah in December 2010.

Mandiri had planned to raise between 13 trillion rupiah and 14 trillion but dropped the size as investors drove the Jakarta stock market .JKSE down more than 10 percent from its record high set early this month due to inflation worries.

Shares in Mandiri, which has a market capitalisation of $12.8 billion, are down almost 15 percent so far this year, while the Jakarta index .JKSE dropped 10.2 percent.

The bank will issue 2.34 billion new shares through a rights issue, diluting the government's stake to 60 percent.

The government portion will be sold in a placement and has been priced at an indicative 5,150 to 5,200 rupiah, or a 5.5 to 6.4 percent discount to Monday's close.

The price is subject to the approval of a shareholder meeting on Jan. 28.

Most of the capital raised would be used to fund loans while the rest would be used for acquisition opportunities in insurance firms, the bank has said.

The bank has picked Deutsche Bank (DBKGn.DE) and Bank of America Merrill Lynch (BAC.N) as joint global coordinators for the offering, with CLSA Asia Pacific Market and Citibank (C.N) as joint global bookrunners. Source: Reuters