ASEAN KEY DESTINATIONS
LPEI to source $1.3b from loans, bond issuance overseas
The Indonesian Export Financing Agency (LPEI) is looking to raise US$1.3 billion from overseas investors to finance operations in 2015.
LPEI finance director Basuki Setyadji said recently that part of the funds, equal to $500 million, would be raised from a global bond issuance.
The agency, which is 100 percent owned by the government, expects to organize road shows to potential investors in Hong Kong, Japan, Singapore and Taiwan to offer the debt papers.
If these plans are realized, it will be LPEI’s second global bond issuance after 2012.
According to Basuki, the agency is also planning to offer debt papers through a private placement. “It may be less costly to do private placement than global bond issuance, but we’ll see. We have not appointed any underwriter for this,” he said.
LPEI is looking to conduct the road shows in the first half of the year in hopes of attracting enough investors before the US Federal Reserve increases its policy rate.
The LPEI has actually received a green light to raise Rp 8 trillion ($632.91 million) from domestic bond issuance in 2015.
“We may offer Rp 4 trillion in bonds during the initial phase, but we may also go all out to generate the Rp 8 trillion in the first half,” he said.
Basuki acknowledged that it benefited from its status as an agency that is wholly owned by te government, which also gave the LPEI a quasi-sovereign status.
As reported before, rating agency Moody’s Investors Service affirmed the agency’s Baa3 long-term local currency and foreign currency issuer and foreign currency senior unsecured bond ratings.
Moody’s said that the rating was in line with the Indonesian government’s rating of Baa3. “Furthermore, the legal mandate that established the bank incorporates strong support of capital, funding and liquidity support from the government,” it added.
The government’s capital support, according to Basuki, will be realized though a capital injection, slated to occur this year. It will receive Rp 1 trillion and the capital injection has been approved within the 2015 state budget.
“With the additional capital, our paid up capital will surge to Rp 11.9 trillion,” he said.
Aside from the debt papers, the LPEI expects to raise part of the funds — the remaining $800 million — from syndicated loans from lenders in Hong Kong, Japan, Singapore and Taiwan.
Syndicated loans are one of the financing sources that the LPEI rely on. Last year, it secured more than $700 million in syndicated loans from 29 foreign lenders.
In 2015, it aims to channel Rp 12 trillion in new financing, bringing its outstanding financing to more than Rp 62 trillion.
Its assets and net profits will also surge to Rp 72 trillion and Rp 1.18 trillion, respectively.
The agency has not published audited financial results for its 2014 operations. However, its unaudited data show that by the end of last year, its assets stood at Rp 60 trillion, outstanding financing amounted to Rp 50 trillion and net profits reached Rp 1.1 trillion.
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