Danareksa set to issue Rp 500 billion in bonds

The Jakarta Post , Jakarta | Thu, 08/02/2007 12:28 PM | Business

The Jakarta Post, Jakarta

To refinance its debts, the country's largest state-owned investment bank, PT Danareksa, announced Wednesday that it would offer five-year bonds worth Rp 500 billion (US$54.26 million) from Sept. 7 through Sept. 11.

The bonds, with a yield of between 10.375 percent and 10.875 percent per year, will be listed on the Surabaya Stock Exchange on Sept. 17., with PT Danareksa Sekuritas, PT Citigroup Securities Indonesia and PT Trimegah Securities Tbk. acting as underwriters.

""We'll pay the interest every three months and we'll make a bullet payment on the expiry date,"" said acting president director Wahzary Wardaya.

He said that the proceeds would be used to repay some of the bank's debts, which include Rp 280 billion in freely transferable loans, and Rp 115 billion and Rp 100 billion in mid-term bank loans. The first two matured earlier this year, while the last will mature in November.

Wahzary said that because the investment company had obtained an A- rating from securities rating firm Pefindo, he was optimistic the bonds would sell well despite the rather low interest rate.

He said that this bond sale would be Danareksa's second. Its first, also worth Rp 500 billion, took place earlier in 2003.

Director Harry Wiguna said that because the first bonds had a higher interest rate of 14.128 percent, Danareksa had wished to buy back all the bonds. However, it only managed to buy back bonds worth Rp 100 billion last year because the owners, which included pension funds, refused to sell.

""We can do nothing as regards the other bonds worth Rp 400 billion that will mature in June next year; we will have to pay up,"" he said.

Danareksa booked Rp 219.4 billion in revenue in the first semester of the year, up by 38.5 percent from Rp 158.4 billion in the same period of 2006. This led to a nearly 300 percent increase in net profit to Rp 83 billion from Rp 21.3 billion previously.

As of March, its total under-management assets stood at Rp 4.41 trillion, compared to Rp 3.51 trillion as of the end of 2006. (11)

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