Bhakti Investama to offer bonds

Bhakti Investama to offer bonds

JAKARTA: Securities firm PT Bhakti Investama said Wednesday it would issue up to Rp 200 billion (US$21.27 million) worth of bonds next month to raise funds for new investments and working capital.

The bonds will be split into two tranches. The company indicated in a prospectus for the issue that the first tranche will offer a fixed coupon of between 18.75 percent and 19.75 percent. The second tranche will offer a fixed coupon of between 19.50 percent and 20.75 percent for the first year, and a floating rate of 250 basis points above the average three-month time deposit rates of major local banks thereafter.

The company has named PT Agung Securities Indonesia as underwriter for the bond issue.

A slew of local companies is tapping the local debt market amid a declining interest rate environment. Bond issues are a means for companies to raise funds as most local banks, which have become undercapitalized following the 1997 Asian financial crisis, are still unable to lend. -- Dow Jones