Antam sells $200m bonds at 7.875%

Antam sells $200m bonds at 7.875%

Dow Jones, Jakarta

Indonesia's state-owned gold and nickel mining company PT Aneka Tambang, or Antam, on Tuesday sold US$200 million of bonds at 7.875 percent, the top end of the indicative range, a source close to the deal told Dow Jones Newswires.

The seven-year bonds, which have a four-year call option, carry a fixed coupon of 7.375 percent.

The bonds were priced at the top end of the company's 7.75 percent-7.875 percent indicative yield range, while the amount of bonds sold was at the bottom end of the $200 million to $275 million band that Antam had indicated.

The mining company had originally planned to issue the bonds Sept. 10 but encountered difficulties as many investors were demanding higher yields.

Market observers had said the delay in the Antam bond sale could also be because the company isn't well-known in the international debt market, despite strong interest from local investors.

"It did take a little longer as it's a new credit many investors had never heard before," the source said.

He said Indonesian investors headed the buyers list with a 63 percent share of the bonds.

Investors from Europe bought 12 percent of the bonds, Hong Kong 10 percent, Singapore 10 percent and the U.S. 5 percent, he added.

Around 60 percent of the buyers were banks, 30 percent fund managers, 5 percent insurance companies and 5 percent hedge funds, the source also said.

Moody's Investors Service has assigned a B3 foreign currency rating to the bonds. The outlook for the rating is stable.

ABN Amro was the sole book runner for the bond.

Antam is 65 percent-owned by the Indonesian government and is listed on both the Jakarta and Australian stock exchanges.

Demand for the Antam bonds wasn't as poor as some had expected, although the eventual size of the deal was at the bottom end of the company's expectations.

Antam is the second local company to tap the offshore bond market after a deadly hotel bombing in Jakarta early last month, which dented sentiment for Indonesian foreign currency debt.

Earlier this month, state-owned gas utility PT Perusahaan Gas Negara, or PGN, was forced to cut its maiden global bond offering to $150 million from the originally planned $200 million due to weaker investor appetite in the wake of the hotel bombing. Having said that, PGN managed to price the bond at the lower end of the indicative yield range, at 7.75 percent, due to the smaller size.

Later this month, state-owned PT Bank Rakyat Indonesia is scheduled to issue between $100 million and $150 million of subordinated bonds. That will be followed later in the year by state-owned oil and gas company Pertamina which plans to sell $500 million of bonds. Indonesian Satellite Corp.is also planning a $300 million offering.