Ciputra Development to float Rp 150b in bonds next month

JAKARTA (JP): Publicly listed PT Ciputra Development, a major property company, will float five-year bonds worth Rp 150 billion (US$65 million) for three days from July 8.

"We'll use the proceeds from the bond issuance to refinance our short-term debt," Harun Hajadi, a director of Ciputra Development, said yesterday after the bonds issuance was made public.

He said that the company's short-term debt -- commercial papers with maturity of less than one year -- amounts to Rp 150 billion.

Harun noted that his company has not yet decided on the interest rate of the bonds. "We will announce it on June 24. The rate will be fixed but the rate will be based on the prevailing market rate if the latter is higher than the fixed one," he said.

According to him, the bonds issue date will be on July 17 and they will be listed on the Surabaya Stock Exchange on July 23.

Harun pointed out that the bonds offer both put and/or call options. The put option gives investors the right to sell the bonds back to the issuer -- Ciputra Development -- three or four years after the issue date. The call option makes the bonds redeemable on demand.

"The issuance of bonds is very important for Ciputra Development. In accordance with short and long-term strategies, Ciputra Development will always search for competitive alternative financing," he said.

The arranger and lead manager for the bonds are PT BT Prima Securities Indonesia and PT Danareksa Sekuritas. PT Bank Dagang Negara was appointed the trustee and paying agent.

Harun, who claimed that Ciputra Development is one of the largest and most profitable property companies in the country, said the bonds have received a BBB rating from the Indonesian rating company PT Pefindo.

Ciputra Development saw its total revenue increase by 20 percent to Rp 513.9 billion last year, while its gross profit grew by 18 percent to Rp 161.4 billion.

Harun said his company expects to see a profit increase of 23 percent this year.

Ciputra Development -- the holding company for Ciputra's property development -- was established by Ciputra in 1981 and was listed on the Jakarta and Surabaya Stock Exchanges on March 1994. Currently, its market capitalization is valued at US$6 billion. (13)