PGN hedges bond interest payment
Thursday, September 9 2004 - 03:15 AM WIB
State owned gas distribution company PT Perusahaan Gas Negara (PGN) had hedged the company's U.S. dollar denominated bonds through interest rate swap to reduce risk from a possible fall in the value of the rupiah against the U.S. dollar, Koran Tempo reported on Thursday.
PGN's president director WMP Simanjuntak said in Jakarta on Wednesday that the hedging had enabled the company to save the interest payment to bond holders by at least 2 percentage point.
"With the hedging we only paid interest payment of between 5.25 and 5.54 percent, much lower than the coupon rate of the bonds which reached 7.5 percent per annum," he said.
PGN issued U.S. dollar-denominated bonds worth US$275 million in August this year to finance its pipeline expansion project. The bonds, listed in the Singapore Stock Exchange, carries interest rate of 7.5 percent per annum. (*)