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Economy in brief: Inalum issues $4b in global bonds
State mining holding company PT Indonesia Asahan Aluminium (Inalum) issued US$4 billion in global bonds on Thursday in London with the issuer’s ratings at Baa2 and BBB-, a source in the government told The Jakarta Post on Thursday
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span>State mining holding company PT Indonesia Asahan Aluminium (Inalum) issued US$4 billion in global bonds on Thursday in London with the issuer’s ratings at Baa2 and BBB-, a source in the government told The Jakarta Post on Thursday.
The bonds are divided into four categories — $1 billion with 3-year tenor, 5.5 percent yield; $1.25 billion with 5-year tenor, 6 percent yield; $1 billion with 10-year tenor, 6.875 percent yield; and $750 million with 30-year tenor, 7.375 percent yield. The proceeds from the bond issuance will be used to purchase shares in gold and copper miner PT Freeport Indonesia (PTFI) as Inalum is currently pursuing a majority stake in PTFI, which currently operates a large copper and gold mine in Mimika, Papua.
The source said that acting as the joint global coordinators (JGCs) were BNP Paribas, Citi and MUFG, while the joint book runners were BNP Paribas, CIMB, Citi, Maybank, MUFG, SMBC Nikko and StanChart.
On Sept. 7, Inalum president director Budi Gunadi Sadikin said that the bond issuance would ensure the healthy financial performance of the company amid the PTFI deal, which is expected to be completed no later than by the end of this year.
Inalum is in process of settling the payment of $3.85 billion to PTFI’s parent company Freeport-McMoran (FCX) and the Rio Tinto Group. When the deal is completed, Inalum will increase its ownership of PTFI shares from 9.36 to 51.23 percent.
