RETAIL INVESTMENT | Cesar Tordesillas, Indonesia

Indonesia's Danareksa targets $103.7-M from bond sales

The Indonesian state investment firm aims to raise up to US$103.7 million or Rp 1 trillion from two phases of bond sales.

“At the moment, we have more than Rp 2 trillion ready for short-term financing. However, because we also run a security business through Danareksa Sekuritas, we will need a long-term financing source next year should anything happen to the shares or the bonds of the companies we represent,” said Danareksa president director Edgar Ekaputra.

In the first phase, Danareksa intends to issue two series of bonds, A and B, with maturities of three and five years, respectively. The company expects to generate about Rp 500 billion from the bonds, which have obtained an A rating from local rating agency Pefindo.

The company will use all the funds raised from the first bond issuance to replace its internal funds used to pay off bonds issued in 2007 that matured last September. The company did not issue the debt papers immediately because it did not need a long-term financing source, according to Ekaputra.

The A series bonds will offer a coupon rate of between 7.25 percent and 8.25 percent per annum, while those in the B series will offer a rate of 7.875 percent to 8.875 percent a year. Coupon payments will be made every three months.

The first bond offering period will take place from Jan. 2 to 4.

Danareksa also plans to hold a second bond issuance next year, although as yet there is no specific time schedule. It hopes to gain the remaining Rp 500 billion for long-term financing.

The company anticipated a higher number of retail investors in 2013 compared to previous years, said Ekaputra

“About 10 years ago, corporate investors dominated the bond market owning 80 percent, followed
by retail investors with 20 percent. Now, they are more on a par,” he added.

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