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Bumi Serpong halves bond issuance to Rp 650 billion
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Publicly listed real estate company Bumi Serpong Damai has cut its bond issuance from Rp 1.5 trillion (US$113 million) to Rp 650 billion, saying that it is waiting for lower interest rates for cheaper bond financing in the future. (Kontan/Muradi)
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ublicly listed real estate company Bumi Serpong Damai has cut its bond issuance from Rp 1.5 trillion (US$113 million) to Rp 650 billion, saying that it is waiting for lower interest rates for cheaper bond financing in the future.
The bond, as the first part of the firm’s shelf-registered bond, will come in two series. The A series with five years’ tenor and a 9 percent coupon worth Rp 625 billion, and the B series worth Rp 25 billion with nine years’ tenor and a 9.25 percent coupon.
"As the domestic interest rates are likely to be decreased, we have decided that half [of the initial issuance] is enough and will save the rest for later. For now, Rp 650 billion is enough," said Bumi Serpong corporate secretary Hermawan Wijaya on Friday in Jakarta.
Bumi Serpong has subscribed to a shelf-registered bond issuance totaling Rp 3 trillion, giving the firm two years to offer the debt securities gradually. As it has halved the first issuance, then it will have to issue the large remainder of Rp 2.35 trillion over the course of the next issuances.
The firm has allocated 40 percent of the proceeds for property development, 20 percent for working capital, and the rest for corporate cash flow. Bumi Serpong's last bonds issuance was in 2013, worth Rp 1.75 trillion with a 9.5 percent coupon. (ags)
