Bumi sets 7.1% yield on $600m bonds sale
Bumi sets 7.1% yield on $600m bonds sale
Leony Aurora, The Jakarta Post, Jakarta
The mining units of Indonesia's largest coal producer PT Bumi
Resources have sold US$600 million of notes to finance their
debts, the first corporate bonds to receive an investment grade
from Fitch Ratings since the monetary crisis.
The bonds, issued on behalf of PT Kaltim Prima Coal (KPC) and
PT Arutmin Indonesia, have a 7.13 percent yield and will mature
in seven years, the company said in a statement released on
Thursday.
The bulk of the bonds' proceeds would be used to pay all of
KPC and Arutmin's debts.
The bonds are rated at BBB-, which is the lowest investment
grade and four notches higher than Indonesia's sovereign rating
of BB-, by the international rating agency.
Merrill Lynch, Pierce, Fenner & Smith Inc. acted as the sole
structuring advisor and bookrunner. The company is working with
PT Danatama Makmur as lead managers for this offering.
Last year, KPC secured a $385 million loan from a bank
syndicate led by the Malaysia and Thailand office of Credit
Suisse First Boston (CSFB) to refinance its debts.
The interest of the debts was four percentage points higher
than the three-month London inter-bank offered rate (Libor).
Bumi's output rose after it bought KPC, which has mines in
East Kalimantan, in October 2003. The acquisition of KPC turned
Bumi into the country's largest coal producer, supplying more
than 6 percent of thermal coal available in the international
market.
Two years prior to acquiring KPC, Bumi bought 80 percent stake
in Arutmin from Australia-based BHP Billiton. Arutmin has mines
in South Kalimantan.
With energy sectors worldwide diversifying amid soaring
international oil prices, coal prices have increased to a record
high last year.
According to Bloomberg data, average coal prices sold by Bumi
in the first quarter of this year rose to $38.6 a metric ton from
an average of $31.8 a metric ton throughout 2004.
In the first three months of the year, Bumi recorded a 73
percent rise in net sales as compared to the same period in 2004
to Rp 3.07 trillion ($319 million).
Net profit from January to March more than quadrupled to Rp
446.7 billion compared with Rp 86.5 billion in the first three
months of 2004.