Antam delays bond issue on weak demand
Thursday, September 11 2003 - 07:16 AM WIB
"We have decided to extend the offering period until the end of the week as book orders are still below our target," Sjahrir Ika told Dow Jones Newswires. "The pricing will therefore be next week."
The delayed pricing comes as concern about Antam's creditworthiness as a relatively unknown borrower in the international debt market continues to weigh on the offering. Antam had already delayed the release of the bond's price guidance to Wednesday from late last week as was planned.
Sjahrir declined to say how much orders Antam's seven-year global bond has received so far. Antam has an option to redeem the bond in 2007.
However, a source close to the deal told Dow Jones Wednesday that orders for the Antam bond had come up to about $250 million, after a weeklong international roadshow that ended in London Tuesday. Three quarters of that demand came from local investors.
The source said Antam is seeking to price its bond at a yield of between 7.75% and 8%. Analysts have said that that's likely to lead to tepid demand as foreign investors are demanding a yield of more than 8% for the perceived relatively higher risks on Antam's commodities assets.
The outcome of the Antam offering is also expected to set an indication of foreign investor reception to upcoming international bond issuance by Indonesian companies, after a deadly hotel bombing in August hurt sentiment for Indonesian paper. (*)