Polysindo secured notes priced at 9.37 percent<\/p>\n
JAKARTA (JP): Indonesia's largest polyester producer,
\nPT Polysindo Eka Perkasa, has announced the pricing of its
\nguaranteed secured notes at a coupon of 9.37 percent.<\/p>\n
The spread of the US$250 million notes, rated Ba2\/BB+, to the
\nU.S. treasuries is 325 basis points, the tightest pricing for an
\nIndonesian corporate in the noninvestment grade.<\/p>\n
The company said in a statement yesterday that the value of
\nthe transaction increased in size to $250 million from $200
\nmillion to meet the robust investors demand.<\/p>\n
Steven Simpson of Polysindo said that the success of the deal
\nreflected Polysindo's strong credit fundamentals and leading
\nmarket position in the polyester industry.<\/p>\n
"We have worked closely with international capital markets and
\ndelivered on our promises to bondholders, and that has resulted
\nin a much lower cost of funding for our company," he said.<\/p>\n
The company said that Polysindo had reduced its borrowing cost
\nin the debt capital markets from an initial 13 percent coupon in
\n1994 to the 9.37 percent achieved in the latest transaction.<\/p>\n
It said proceeds from the issuance would be used to finance
\nthe company's recently announced five-year $800 million expansion
\nprogram and for other financing purposes.<\/p>\n
"The expansion program is based on the company's strategy of
\nvertical integration, increasing upstream capacities in purified
\nterepthalic acid and polymer to support downstream production of
\nyarns, fibers and fabrics," it said.<\/p>\n
The company will also include significant capacity expansion
\nin filament yarn and the addition of higher-margin product lines,
\nsuch as polyester fleece fabric and coated active-wear fabrics.<\/p>\n
Elizabeth Chandra, executive director of Morgan Stanley & Co.,
\nsaid that the transaction was a tremendous success.<\/p>\n
"It was priced through the level of the company's existing
\ndebt and increased in size despite uncertainty in the Asian
\ncurrency market," she said.<\/p>\n
The notes, to be matured on July 20, 2007, were issued by
\nPolysindo Finance Company B.V, a financial arm of PT Polysindo
\nbased in the Netherlands Antilles.<\/p>\n
The company said that the notes would be callable in five year
\nat par plus half the coupon, declining to par in year seven.<\/p>\n
The transaction was lead-managed by Morgan Stanley & Co., with
\nMerrill Lynch and Bankers Trusts as comanagers.<\/p>\n
PT Polysindo Eka Perkasa, a subsidiary of Texmaco Group, is
\nlisted on the Jakarta and Surabaya Stock Exchanges. (aly)<\/p>",
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