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Monday, November 16, 2009

Salim Ivomas bond coupon at 11.65%

as published in Bisnis Indonesia daily
Monday, 16/11/2009 00:00 WIB
Salim Ivomas bond coupon at 11.65%
Total corporate debt per May 2009 stood at IDR6 trillion

JAKARTA: PT Salim Ivomas Pratama set the bond coupon and sharia bond of I/2009 on the level of 11.65 percent with the booking up to last week remaining under the target of IDR1.25 trillion.

Bisnis resources said the emitter nomination was not willing to increase the coupon value of both securities so some potential investors dropped their booking.

"That is based on their finance profile. If the coupon grows up, it will change their business strategy , particularly the existing loan profile," said Bisnis resource yesterday.

The company will ensure the number of issuance and coupon worth today after setting the early coupon by end of last week.

With the coupon, the demand for bonds could be lower than the corporate targeted value.

"The market is good with a slightly higher coupon, there should have had more investors and the issuance amount could stand at IDr1.25 trillion or up to IDR1.5 trillion for both securities here," other resources added.

Bond and sharia bond issuances had potentially to rise up to IDr1.5 trillion from IDR1.25 trillion. The bond and sharia bond issuance value stands at IDR1 trillion and IDR250 billion.

On the last month public expose, the coupon of both bonds were set slightly higher by 175-225 bps above the FR0026 or 11.1-11.6 percent.

When asked, Director of Investment Banking of PT Danareksa Sekuritas Marciano Herman was not willing to give comment noting the ongoing process of bond issuance.

SVP Head of Debt Capital Markets of PT CIMB Securities Indonesia A. Siwiwardhani was not available for comment yesterday.

In the issuance of securities here, in addition to Danareksa Sekuritas and CIMB Securities, Salim Ivomas assigned four other securities firms to become underwriters, namely PT OSK Nusadana Securities Indonesia, PT Mandiri Sekuritas, and PT Kim Eng Securities.

Salim Ivomas plans to spend IDr1 trillion of the bond and sharia bond tender offer to restructure some of the short term debt. Besides, the company also need to use some IDr250 billion fund from the sharia bonds issuance for the firm capital expenditure in transportation.

The company plans to restructure most of the short term loans gained from some national banks. Based on the corporate finance report per May 2009, the company still has short term obligation worth IDr2.18 trillion and long term one is IDR3.85 trillion.

Following the bond issuance, the composition of long term debt is predicted to increase into 76 percent. (21)

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