Unggul Indah to issue Rp 600b bonds

Unggul Indah to issue Rp 600b bonds

JAKARTA: Indonesia's petrochemical company PT Unggul Indah Corp. will issue Rp 600 billion (US$70.9 million) in five-year bonds in October mainly to repay a debt and to help expand production, it said Monday.

The bond, its first-ever issue, will be split into a fixed- coupon and a floating-rate tranche. The company has yet to decide the rates.

Unggul Indah said 70 percent of the proceeds will be used to help pay back a $73.6 million syndicated loan, which was arranged by JP Morgan Chase Bank. It didn't provide further details on the loan. It will also use some of its own cash to repay the loan.

It has named PT Trimegah Securities and PT Danatama Makmur as joint lead underwriters for the bond, which will be sold at the full price.

The company booked a net profit of $9.01 million in 2002, up from $8.86 million in 2001.

Unggul Indah is one of a slew of local companies tapping the domestic debt market this year due to cheap borrowing costs amid falling interest rates. But demand for bonds is still healthy because of the better returns offered than bank rates. -- Dow Jones