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Thursday, April 14, 2011

FIF upsize bond to IDR3 trio, more ruthless fee war?

14/4/2011
Irvin Avriano A.

FIF upsize bond to IDR3 trio, more ruthless fee war?

JAKARTA: PT Federal International Finance (FIF), an Astra Group motorcycle financing company, open opportunity to hike up their IDR2 trillion proposed XI/2011 bond up to IDR3 trio, caused by huge demand from potential investors.

Based on four capital market participants information, the company is already set their bond's coupon at 7.8%, 8.8%, and 9.6% level.

"There is an opportunity to hike up the issuance amount up to IDR3 trio, with best effort mechanism. So, the option still can not be said already hiked up, but the potency still there," said one of the capital market participant yesterday.

The predetermined amount of the bond's coupon is still in range offered by the fixed income issuer in the pre-offering period: 6.97% to 9.84%.

The company offered coupon for A tranche at 6.97%--7.97% level, B tranche at 7.92%--8.92%, and C tranche 8.59%--9.84%. The A tranche tenured 370 days, while B tranche tenured 24 months, and C tranche 36 months.

One of other debt capital market participant said the potential increase of the amount of bond unfortunately makes their underwriters slammed the bond price in the offering and offered extra discount to their future investors.

"The underwriting business is getting ruthless. it is also compounded by many underwriters that been appoint by FIF, six companies."

In the issuance, the lead underwriters consists of PT Mandiri Sekuritas, PT Danareksa Sekuritas, PT NISP Sekuritas, PT HSBC Securities Indonesia, PT Indo Premier Securities, and PT Kresna Graha Sekurindo Tbk.

The proposed bond already pocketed idAA rating from PT Pemeringkat Efek Indonesia (Pefindo), one of local credit rating company that have close affiliation to Standard & Poor's.

This year, FIF will have to paid off IDR1.01 trio matured bond that divided into four tranches. Most of them will mature in the next month.

There are IX/2009 series B tranche worth IDR93 billion on April 29th, VII/2007/D IDR350 bio on May 2nd, X/2010/A IDR300 bio on Mei 4th, and VIII/2008/C IDR360 bio on May 13th.

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