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Friday, February 12, 2010

IDR25 trillion bonds ready to flock market: Floating bond value has stagnant growth outlook

By Irvin Avriano A.

IDR25 trillion bonds ready to flock market: Floating bond value has stagnant growth outlook

JAKARTA: PT Pemeringkat Efek Indonesia (Pefindo) unveiled at least 11 companies, five of them the regional development banks, plan to issue bonds with a total value of IDR20-25 trillion.

Director of Pefindo Salyadi Saputra said seven out of 11 firms have called the institution for rating. Pefindo along the year usually rates 90 percent of the total bond issuance.

"Corporate bond issuance value this year will be lower than the issuance of two factors, interest rate risk and investment limit of pension fund institution at the level A limit," he said yesterday.

IDX records the total bond issuance value this year stands at IDR29.66 trillion by 33 emitters. Thus, floating bond value at market has stagnant growth outlook with potential plummet of 14 percent from last year.

However, unlike Salyadi, President Director of PT Penilai Harga Efek Indonesia (PHEI) Ignatius Girendroheru said the company considered the bond issuance this year will be the same as the last year issuance worth IDR29.66 trillion.

He said the prediction is based on several interests for the suspended bond issuance in 2009. "Overseas investors demand also grew larger for Indonesian bonds as reflected by the soaring foreign absorption for the government bonds."

Salyadi predicted in semester I, the total bonds issued is IDR10-15 trillion and semeseter II with lower value of IDR5-10 trillion.

The bond issuance in semester I comes from seven emitters. As from the seven firms and finance institutions, five of them is the regional development bank (BPD).

This year PT Bank Permata Tbk also plans to issue subdebt worth IDR700 billion in quarter I. PT Indosat Tbk and PT Bank Tabungan Negara Tbk is possibly to issue bonds this year.

In addition, there are some emitter candidates that have fallen short of bond issuance schedule but it is surely this year. Those include State Pawnshop and PT Federal International Finance.

Pawnshop will issue promissory notes (PN) with shorter tenure than the medium term notes (MTN) or less than IDR1 trillion. PT Federal International Finance also plans to issue IDR1.5 trillion MTN.

Financ Director of Pegadaian Budiyanto conceded the info. The company still studies MTN issuance option this year. The selection of underwriter for IDR2 trillion bond issuance is scheduled by end February or early March.

"The issuance will be done by the company in June or July this year. We have not defined the MTN or PN. We take both as our alternatives with DR500 billion value. The issuance depends on the capital market condition and MTN and PN markets," he said.

Finance Director of Federal International Finance Juliani Eliza Syaftari also admitted the info. She said MTN issuance worth IDR2 trillion is expectedly carried out in quarter II/2010.

"But the total figure for the issuance only stands at IDR700 billion. so far we have issued up to IDR1.3 trillion MTN. The latest, we issued IDR300 billion MTN in January," she said.

Finance director of State electricity company (PLN) Setyo Anggoro Dewo said the company also intends to issue at least IDR1.5 trillion bonds in semester I in a bid to finance transmission project of the first phase of 10,000 MW project. (Bisnis/bsi/iaa)



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