PLN's five-year bonds book oversubscription

JAKARTA (JP): The State Electricity Company's (PLN) four-year bonds worth Rp 680 billion (US$300 million) have been oversubscribed by 66.61 percent, said the lead underwriter of the bond issue.

"The applications for the bonds reached Rp 1.1 trillion, excluding letters of interest for the debt instruments amounted to Rp 400 billion," the chief executive of the state-owned investment trust company PT Danareksa Sekuritas, Agus Projosasmito, said Wednesday.

He said the funds collected from the bond issuance will be used to finance PLN's electricity projects in West Java, Sumatra, Batam and Bali.

The bonds, the fourth of their kind floated by PLN, were offered to the public from Aug.3 to Aug.14 and were listed on the Surabaya Stock Exchange (SSE) on Sept. 4.

Agus said the bonds were divided into two categories: 2,300 pieces worth Rp 302.8 billion categorized as series A, and 671 pieces valued at Rp 377.2 billion as series B.

The bonds of series A carry coupons with a fixed interest rate of 18 percent per annum in the first year and a floating interest rate of 1.75 percent per annum above the average interest rate offered by five major banks on their six-month deposits in the following three years, while the bonds of series B offer a fixed annual interest rate of 18 percent in the first year and a floating interest rate of 1.25 percent above the six-month Indonesian Rupiah Currency Swap Offer Rate (IRSOR) in the next three years.

The five major banks are Bank Negara Indonesia, Bank Tabungan Negara, Bank Ekspor Impor Indonesia, Bank Niaga, Bank Bali and Bank Dagang Nasional Indonesia.

"Out of the bonds, 53.78 percent were allotted for foreign investors, consisting of financial institutions and banks, and the other 46.06 percent for domestic investors," Agus said.

He added the foreign investors preferred the series B bonds which are based on IRSOR, which minimizes risks caused by possible devaluation of the rupiah.

"Foreigners preferred the swap offer rate to minimize the risk through hedging," Agus commented.(kod)