Pertamina to sell $100m bonds

Pertamina to sell $100m bonds

JAKARTA: Pertamina, Indonesia's state oil company, said the US$100 million-denominated bonds it plans to sell to fund construction of oil tankers will mature in between seven and 10 years.

The company plans to sell the bonds in the third-quarter of this year and will next month name advisers for the sale, Finance Director Ainun Naim told reporters.

"We're planning to issue more bonds in the future as a source of investment," Naim said. "The bonds will be issued by our subsidiaries, depending on our needs."

Pertamina joins rival Indonesian companies seeking to capitalize on investor appetite for high-yield corporate debt. PT Medco Energi Internasional, Indonesia's biggest publicly traded oil company, last week sold $250 million of seven-year bonds globally, one-quarter more than the amount first planned.

With 10-year U.S. Treasuries yielding about 3.37 percent, Indonesian debt is drawing investors looking for higher returns, encouraged by Standard & Poor's May 12 upgrade of the sovereign's long-term foreign currency rating to B- from CCC+, still below investment grade.

In an auction last week, the central bank sold one-month bills to yield 10.8 percent, the lowest level since such bills first traded in July 1998. --Bloomberg