P

T Ciputra Residence, a subsidiary of publicly listed property giant PT Ciputra Development (CTRA), is aiming to reap up to Rp 500 billion (US$42.9 million) from bond sales this year to finance its housing projects across Indonesia.

The company plans to issue three series of bonds, A, B and C, with maturities of three, five and seven years, respectively.

The A series bonds will offer a coupon rate of between 11.2 percent and 12.2 percent per annum, the B series with a rate of between 11.65 percent and 12.65 percent, while the C series will have a rate of between 11.75 percent and 12.75 percent. Coupon payments will be made quarterly.

The bond offering period will take place on March 24-25. Ciputra Residence is scheduled to list the bonds on the Indonesia Stock Exchange (IDX) on April 1 and has appointed PT CIMB Securities Indonesia and PT Mandiri Sekuritas as underwriters for the sales.

Ratings agency PT Fitch Ratings Indonesia has assigned an 'A(idn)' rating for the bonds, which have a 20 percent credit guarantee from the International Finance Corporation (IFC) and 120 percent from the Ciputra Residence's fixed assets. The agency, at the same time, had also published Ciputra Residence's national long-term rating and national senior unsecured rating at 'A-(idn)'.

'This is the first bond sales by Ciputra Residence and the second by Ciputra Development,' Ciputra, owner of Ciputra Development, said on Monday.

'We will use the funds raised from the bond issuance for our on-going and future residential projects to meet growing demand for housing in the country,' he said, adding that the current housing demand had reached 14 million units a year.

Ciputra Residence will use the fund for its six on-going and eight future residential projects targeting middle to lower-income households as well as small and medium-sized businesses.

Among the on-going projects are Citra Garden City in Jakarta, Citra Raya in Tangerang in Banten, Citra Grand City in Palembang in South Sumatra, while future projects include Citra Grand City in Pekanbaru in Riau, Citra Palm Garden in Sentul, West Java and Fatmawati high-rise residences in Jakarta.

The 14 housing projects are expected to occupy 4,026 hectares of land.

Ciputra Residence non-affiliated director Agussurja Widjaja said at the same event that his firm was cooperating with major Japanese real estate developer Mitsui Fudosan Residential Co., Ltd. on its two on-going projects, high rise residence Citra Menara Megah in Jakarta and Citra Ecopolis Raya residence in Tangerang.

'We hold a 51 percent stake in the joint venture company, while Mitsui holds the remaining 49 percent,'
he added.

Ciputra Residence, which has been in operation since 1989, has doubled its revenues from only Rp 309.6 billion in 2010 (full year) to Rp 672.4 billion in the period of January to September last year, according to the company's latest financial report.

Its net profit has surged by almost four times from only Rp 41.3 billion in 2010 to Rp 191.9 billion in the period of January to September last year.

'The rise of our net income was mainly caused by land and building price hikes,' Agussurja told reporters. (koi)