JAKARTA. Salim Group’s issuers, including Indomobil Finance Indonesia (the subsidiary of PT Indomobil Sukses Internasional Tbk (IMAS), will release bonds to raise funds.
Indomobil Finance will release Continuous Bond II Indomobil Finance Indonesia With Fixed Interest Rate Phase IV Year 2017 with a principal value of Rp 400 billion. This issuance is part of Bond II Indomobil Finance Indonesia with a maximum ceiling of Rp 3 trillion.
According to a document received by KONTAN, the bonds will be divided to four series, namely series A to D. The series A, B, C, and D coupons will be ranging at 7.75%-8.50%, 8.25%-9%, 8.5%-9.25%, and 9%-10%, respectively.
Initial offering period has been started on Thursday (9/2) and will last until 24 February. The obtained funds will be allocated for work capital of motor vehicles financing.
Another Salim Group’s issuer, PT Indofood Sukses Makmur Tbk (INDF) also has revealed its plan to issue bonds. Nonetheless, the management of INDF still refused to mention the amount of the issuance. One of KONTAN’s sources said, the issuance would amount to Rp 2 trillion and would be allocated to refinancing purpose.
INDF is planning to refinance its debts, which will mature in this year. INDF’s bonds worth Rp 2 trillion will mature on 31 May 2017. Those are the rupiah obligation VI year 2012 with five-year tenor and with fixed interest rate at 7.25% per year. At that time, INDF allocated the funds to refinancing the previous debts and to enhance the work capitals.
As per third quarter of 2016, INDF has as much as Rp 2.2 trillion long-term debts, which will mature in one year period, while the total cash and cash equivalent of the company amounted to Rp 11.4 trillion.
INDF has appointed six underwriters to support this corporate action, including PT Mandiri Sekuritas, PT BCA Sekuritas, PT CIMB Securities Indonesia, PT DBS Vickers Securities Indonesia, PT Indopremier Securities, and PT Trimegah Securities Tbk.
Investment Director of Sucorinvest Asset Management Jemmy Paul said that the trend of bonds of this year can be divided into two time frames, namely the first semester and the second semester of 2017.
In the first semester of 2017, the macroeconomic condition would remain conducive for issuing bonds.
The situation will be more challenging in the second semester. “The (situation) in the first semester will be more attractive, thanks to the probability of S&P upgrade and the increase in commodities prices that may support Indonesia’s economic growth,” Jemmy said.
Therefore, the fluctuation of rupiah exchange rate would be more controllable in the first semester. In the second semester, The Fed (the US central bank) would probably increase the interest rate, while the US is likely to cut corporate tax so that the US dollar would be stronger.
The stronger US dollar may lead into rupiah depreciation. Under this circumstance, the interest rate would potentially to increase. This sentiment will be less conducive for issuing bonds.
Analyst at NH Korindo Securities Indonesia Bima Setiaji added, the trend of private bonds issuance would also determine the conduciveness of the bonds’ trend.
He predicts that many issuers will release new bonds so that the competition would be more intense. “Under the intense competition, the investors will demand for the higher required returns,” Bima added.
Bima said, private companies’ bonds may be attractive if the deposits’ rate rises in a moderate manner. In this case, the deposits rate rise may lead to crowded funding.
On the other hand, the lower BI 7-day reverse repo rate would be the positive catalyst for the demands for corporate bonds. Let alone, if the issuer is part of the major group in the consumer sector. For an example, the MYOR’s bonds are attractive for the investors. According to BIMA, MYOR’s bonds were oversubscribed Rp 500 billion. (Muhammad Farid/Translator)
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