Indofood Joins the Rush to Tap Bond Market

Rabu, 25 Januari 2012 | 09:13

Indofood Sukses Makmur, the country’s biggest noodle producer, plans to sell Rp 2 trillion ($222 million) of bonds this year to help refinance its maturing debt, a company executive said.
Werianty Setiawan, corporate secretary of Indofood, said the bond sale will depend on this year’s market conditions.

The company hired Mandiri Sekuritas, Kim Eng Securities, DBS Vickers Securities Indonesia, Indo Premier Securities and CIMB Securities Indonesia to help arrange the debt sale, Werianty said in a filing sent to the Indonesia Stock Exchange (IDX) on Friday.

“Proceeds from the bond sale will be primarily used to refinance our debt issued in 2007 and repay some of our short term debt,’’ Werianty said, without elaborating the size of the amounts falling due this year.

Many Indonesian companies are selling bonds to capitalize on low borrowing costs following the recent sovereign debt rating upgrades from ratings agencies Moody’s Investors Service and Fitch Ratings.

Indomobil Finance Indonesia, the auto financing unit of Indomobil Sukses Internasional, is set to sell Rp 4 trillion in bonds. Gunawan, a director of Indomobil Finance, said on Friday that the company would sell Rp 750 billion in the second quarter of this year, with the remaining Rp 3.25 trillion to be sold in the next two years.

Astra Sedaya Finance, the car financing unit of auto distributor Astra International and Indomobil Sukses’s biggest competitor, plans to sell Rp 2 trillion in bonds in February and use proceeds to provide finance to customers purchasing vehicles.

Bank Indonesia has kept its benchmark interest rate at 6 percent, a record low, after cutting the policy rate by a total of 75 basis points in October and November last year.

BI has forecast the economy to expand 6.3 percent this year, slowing from an estimated 6.5 percent expansion last year.

By Francezka Nangoy