PLN raises US$1.4 billion from global bonds issue

State electricity company PT Perusahaan Listrik Negara (PLN) has successfully raised US$1.4 billion from issuing global bonds at lower rate than the market interest rate.

PLN said in a statement that the USD global bonds rate is the lowest ever issued by both PLN and other state-owned companies in Indonesia with tenor of 10 and 30 years.

The global bond is divided in two tranches, namely tranche A worth US$700 million at coupon rate of 3.875 per cent per annum for tenor of 10 years and 4.875 percent per annum for tenor of 30 years.

The company said it managed to convince global investors during series of roadshow in a number of financial centers, such as Hong Kong, UK, Singapore, and the United States since July 4, 2019.

PLN said it also secured positive ratings from international credit rating agencies for the global bonds issue, namely Moody's, S&P and Fitch Ratings. The three rating agencies gave investment grade ratings of Baa2, BBB and BBB respectively.

The investment grade rating is equal to the sovereign rating of the Government of Indonesia.

Finance Director of PLN Sarwono Sudarto said the company's global bond issuance was 4.42 times oversubscribed, indicating strong appetite of global investors.

"PLN manages to utilize the positive market momentum, therefore PLN's global bond issue has been oversubscribed and also received a very competitive interest rate," said Sarwono.

PLN said it will use the proceeds of the global bonds for financing its power plant as well as electricity transmission projects.

PLN conducted book-building process on July 10, 2010 since morning and closed in the afternoon. During the book-building process to assess market interests, PLN received orders from 118 global institutional investors for the bond trance of 10-years and 131 institutional investors for the bond tranche with tenors of 30-years.

The settlement of the global bonds issue is scheduled to be completed on July 17, 2019 and to be listed on the Singapore Stock Exchange.

The Joint Arrangers and Join Bookrunners of the PLN's global bond issue are BNP Paribas, Citigroup, HSBC, Mandiri Securities, and Standard Chartered Bank.

Acting as the co-managers from Indonesia are PT Bahana Sekuritas, PT BNI Sekuritas, and PT Danareksa Sekuritas.

Editing by Roffie Kurniawan