by Elisa Valenta
Amid the COVID-19 pandemic, two state-owned enterprises have successfully raised hundreds of millions from global bonds issuance to support business expansion.
Bank Mandiri offered $500 million global bonds to fulfil foreign investors demand, mostly from Asia and Europe. The lender said in a statement; the debt paper was oversubscribed by almost five times with demand reaching more than $2.4 billion. The global bond offered a coupon of 4.75% per year and would mature in 2025.
The proceeds from the bond issuance would be used to strengthen its financing capacity, as well as to support the bank’s business in the medium to long term.
Earlier, state-owned construction company, Hutama Karya has successfully launched its first ever-global bond of $600 million with a coupon of 3.75%. The firm reported the bond was oversubscribed by six times amid the high demand from investors in Asia, Europe, the Middle East and the United States, after getting an investment-grade rating from Moody’s and Fitch.
Hutama Karya CEO, Bintang Perbowo, said that the fund from the issuance would be used to finance the Trans-Sumatra toll-road project which length of more than 2,700 kilometers. However, the firm still has to raise $1.5 billion issuance plan until next year to deliver the toll-road project.
SOEs Minister, Erick Thohir praised the global bond issuance amid the global uncertainty. He encouraged other SOEs to seek another source of funding instead of relying on banks. “Investors' high interest in the global bond shows that Indonesia has become one of the world’s most interesting investment destinations,” he said in a statement.