DJ Indonesia/PGN/Bond -2: On Roadshow In London
DJ Indonesia/PGN/Bond -2: On Roadshow In London
Dow Jones
Jakarta
Indonesia's PT Perusahaan Gas Negara, the state-owned natural
gas utility, said on Wednesday it may delay pricing its planned
US$200 million bond offering to give it time to assess the effect
of a deadly bomb attack in Jakarta on investor sentiment.
Tuesday's bomb in the JW Marriott Hotel, which killed at least
14 people, came as PGN officials were in London on the last leg
of an international roadshow to market its planned 10-year
dollar-denominated bond.
The company had said previously it was expecting to price the
bond this week after finishing a two-week roadshow.
"Now we don't yet know. We're waiting for the market's
reaction to the bomb," Joko Pramono, PGN's finance director, told
Dow Jones Newswires in a telephone interview from London.
State-owned oil and gas company Pertamina, however, said it
remains on schedule to tap global bond markets later this year.
The Marriott Hotel bombing has sparked fears among investors
that Indonesia's economy remains at risk from terrorism. The
attack came ahead of Thursday's verdict in the trial of a key
suspect in last year's Bali bombing, which killed 202 mainly
foreign tourists. Officials say Jemaah Islamiyah, a regional
terrorist network with links to al-Qaida, carried out the Bali
attacks.
The government has arrested scores of Jemaah Islamiyah members
since the Bali attack in October last year, helping to restore
investor confidence, and allow companies like PGN to issue bonds.
Last month, state-owned PT Bank Mandiri was able to raise $320
million through an initial public offering, mainly to foreign
investors.
But on Tuesday's bombing showed that terrorism remains a major
threat to the economy, analysts say.
DJ Indonesia/PGN/Bond -3: Indosat Among Other Likely Issuers
Other Indonesian companies planning international bond
offerings are: PT Indonesia Satellite, a telecommunications
company controlled by a Singapore government investment firm;
state-owned miner PT Aneka Tambang; and PT Bank Rakyat Indonesia,
also state-owned.
The Indonesian government also plans to issue around $400
million, possibly as early as this year, to help fund its budget
deficit in 2004.
Fears of further attacks could undermine these planned issues,
with Indonesian stocks and the rupiah expected to remain under
pressure in the short term, analysts say.
Stocks were up 1 percent at 493.616 points midday on
Wednesday, while the dollar was 0.5 percent weaker at Rp 8,565.
But both stocks and the rupiah were still weaker than levels
before the bombing.
The local stock market has gained about 18 percent this year
due in part to improved investor confidence over the security
situation. A stronger rupiah has also allowed the government to
reduce inflation, and lower interest rates. The government also
officially announced last week that it plans to stop borrowing
from the International Monetary Fund when its current program
runs out at the end of this year.
For now, the government says it doesn't expect the economy to
suffer from the latest blast, but investors are likely to be more
cautious about Indonesia, analysts say.
PGN is hoping to price its bond, which offers a put option in
2010, to yield about 7.75 percent to the put date. Credit Suisse
First Boston is the lead manager of the offering.
But the company may now have to offer a higher yield if it
pushes ahead with the bond, analysts say.
Moody's Investors Service has assigned a B3 senior unsecured
rating to the proposed issue. Standard & Poor's Ratings Services
has assigned a B- foreign currency rating to the PGN bonds.