Chase to arrange $2.5b in local syndicated loans

JAKARTA (JP): Chase Manhattan Bank plans to arrange about US$2.5 billion in syndicated loans for Indonesia in the first quarter of this year, its executives said yesterday.

Senior country officer for Indonesia, Morgan T. McGrath, said these loans would go mostly to telecommunications, mining, oil and gas and chemical projects.

The bank is involved in a $1.1 billion syndicated loan that was formalized earlier this week for state-owned oil and gas company Pertamina.

McGrath said that, by the end of March, the bank would also close a transaction for the development a gas field in South Sumatra.

On finance for telecommunications, the bank plans to be involved in a $400-million syndicated loan for PT Exelcomindo's global system for mobile communications project and a $200- million loan for PT Ratelindo.

"When you add these up, during the first quarter we will close almost as much as we did (for the whole of) last year," McGrath said.

In 1996, Chase arranged or lead-managed more than $2.5 billion worth of finance facilities for private corporations, financial institutions, government bodies and state enterprises.

Among these were a $500 million standby loan facility with Bank Indonesia for the Indonesian government, a $150 million refinancing facility and a $200 million bond issue for PT HM Sampoerna, a Rp 250 billion ($107 million) revolving credit facility for PT Astra Sedaya Finance, a $350 million project loan for PT Pramindo Ikat and a $614.85 million limited resource financing facility for PT Ariawest International.

"Most important is the growth of the telecommunications industry in Indonesia and the continued need for large amounts of financing in that industry. That trend, we think, will make telecommunications the most active industry for debt-raising for 1997 for Chase," he said.

Visiting managing director and group head of Chase Manhattan's Global Syndicated Finance, Peter Gleysteen, said yesterday that more than $1 trillion was raised through bank syndications worldwide.

"From this $1 trillion, Chase Manhattan arranged more than one-third," he told reporters.

Gleysteen, who is based in New York, said that Indonesia's government and private enterprises should be able to raise more funds from the international syndicated loan market.

"Chase Manhattan sees Indonesia as a strategic priority because... Indonesia has very strong and very long-term fundamentals of economic growth which will need assistance from financial institutions," he said.

The Asia-Pacific managing director of Global Syndicated Finance, Elizabeth C. Chow, said worldwide syndicated loan market grew 13 percent last year.

Syndicated loan growth in Asia was 60 percent, although it represented less than 10 percent of the worldwide volume.

She predicted there would be $100 billion worth of syndicated loans in Asia this year: of which 15 percent, or $15 billion, would be for Indonesian borrowers.

She said Indonesia was the third largest borrower after Australia, with 25 percent of Asia's syndicated loans, and Hong Kong, with 20 percent.

"With the combination of high economic growth, large companies' increasing access to the bank market... we see 1997 as being a very active year in Indonesia in the syndicated loan market," Chow said. (pwn)