Pertamina Raises a Record $3.25 Billion From Bond Sale

A Pertamina worker walks near an oil well on Bunyu island in East Kalimantan in this file photo. (Reuters Photo)

A Pertamina worker walks near an oil well on Bunyu island in East Kalimantan in this file photo. (Reuters Photo)

State-owned energy company Pertamina said on Wednesday that it raised $3.25 billion from its latest dollar-denominated bond sale, a huge boost to its attempt to emerge as a dominant player in the region.

The amount is the highest of such a bond issuance from Indonesia to date, highlighting the growing trend of Indonesian corporations tapping into the bond market.

“The offerings were closed on Tuesday,” said Afdal Bahaudin, the director of investment planning and risk management at Pertamina.

Pertamina received overwhelming interest for international investors, with offerings oversubscribing the initial target of 4.4 times, Afdal said.

Pertamina booked $14.4 billion in orders from 667 international investors. The offering was divided into two tranches with 10-year and 30-year tenors.

Pertamina raised $1.625 billion from 10-year bonds with a coupon rate of 4.30 percent that is priced at par to yield at 4.30 percent. The remaining 30-year bonds were priced to yield at 5.625 percent.

The issuance was part of Pertamina’s $5 billion global medium term note program established early this month.

The 10-year notes were distributed to investors from Europe, United States and Asia, with 39 percent, 32 percent and 29 percent, respectively.

The 30-year notes were allocated 38 percent to Asia, 22 percent to Europe and 40 percent to the United States.

The bond issuance was the largest ever for an Indonesian corporation and also had the lowest ever coupon rate.

“With this transaction, Pertamina completed the largest international bond offering to date by an Indonesian issuer while establishing record-low coupons across both 10- and 30-year maturities by an Indonesian corporation,” Andri T. Hidayat, Pertamina’s finance director, said.

“The offering is a testament to international investor sponsorship for Pertamina and recognition of Pertamina’s prospects in the years ahead.”

Pertamina has appointed Barclays Capital, Royal Bank of Scotland and Citigroup as the lead arrangers with Bahana Securities, Danareksa Sekuritas and Mandiri Sekuritas acting as co-managers.

Pertamina made its debt market debut in 2011, when it raised $1.5 billion from selling medium- and long-term bonds.

Last year, Pertamina raised $2.5 billion from a similar bond issuance.

Indonesian corporations have been increasingly looking at the international bond market as a source of financing.

Indonesia raised $3 billion from selling its dollar-denominated bonds, the first sovereign debt sale, this year.

Pertamina is one of the world’s largest producers and exporters of liquefied natural gas.