PLN raises $1 billion in bond sale

State electricity company PT Perusahaan Listrik Negara (PLN) sold US$1 billion of bonds after getting $6 billion in bids in the nation?s biggest corporate debt sale overseas, a person familiar with the transaction said. The Jakarta Post reported Friday.

PLN sold $450 million of five-year bonds priced at a yield of 7.4 percent, lower than the guidance of 7.5 to 7.75 percent that was earlier provided to investors, the person said, who declined to be identified.

PLN sold $550 million of 10-year bonds at a yield of 7.9 percent, lower than the 8 to 8.25 percent guidance, the person said.

The 10-year bonds offered a yield that is about 144 basis points more than similar-maturity government bonds. More than 70 percent of the bonds were bought by bond funds, with less than 15 percent going to banks, the person said.

The Indonesian sovereign bonds maturing March 2017 are yielding 6.458 percent as of Oct. 11. A basis point is 0.01 percentage point.

PLN?s bonds are rated BB- by Standard & Poor?s, three steps below investment grade. Moody?s Investor Service rated the debt as B1, the fourth highest non-investment grade, the same rating as Indonesia?s sovereign debt.

UBS AG, Switzerland?s largest bank, and Jakarta-based PT Danareksa Sekuritas were hired to arrange the sale and sold about 70 percent of the bonds to investors in Europe and the U.S., the person said. More than 250 investors bought the bonds, the person said.

PLN have to raise $1 billion as an advance for the power plant projects in Java, Djuanda Nugraha Ibrahim, a director at PLN said on Sept 29. (*)