Danareksa to issue Rp 500b in bonds

The Jakarta Post ,  Jakarta   |  Tue, 05/13/2008 10:39 AM  |  Business

To refinance its debts, state-owned investment firm PT Danareksa will issue bonds worth Rp 500 billion with fixed interest rates from June 10 to June 12.

Company President and CEO Edgar Ekaputra said the bonds would be divided into three types: "A series", worth Rp 200 billion with a two-year maturity period, "B series", worth Rp 100 billion with three-year maturity, and "C series", worth Rp 200 billion with five-year maturity.

The yields of the bonds will be about 1 to 1.75 percentage points above the average yields of government bonds FR 0012, FR 0016 and FR 0033 respectively, and will be determined during the last five days before the closing of the book building period on May 12 to May 21.

He said approximately 80 percent of all bond proceeds would be used to pay off earlier bonds set to reach maturity next month. The rest of the proceeds, he said, would be used to support the firm's working capital.

Commenting on market sentiments on Indonesian bonds amid growing fears over the government's fiscal policy, Edgar said market players should not be overly concerned.

"The market situation will be better after the central bank has increased its interest rate to 8.25 percent," he said, "The market can absorb the bonds."

The central bank raised its benchmark interest rate by 25 basis points to 8.25 percent early last week after year-on-year inflation reached 8.96 percent in April.

The bonds, underwritten by PT Danareksa Sekuritas, PT Bahana Securities and PT Mandiri Sekuritas, will be listed on the Indonesia Stock Exchange on June 18.

For the issuance of the bonds, Danareksa has obtained "A" (single A) status from securities rating firm PT Pemeringkat Efek Indonesia (Pefindo), higher than the "A-" (single A minus) rating for the second issuance. (rff)

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