PT Bumi Resources plans to make a missed interest payment on its $300 million of 12 percent notes next week, Director Dileep Srivastava said. The 2016 bonds rallied today, erasing an earlier decline.
The Indonesian coal producer had a grace period until June 11 to make the payment, which was originally due May 12, Srivastava said in an e-mail today. It’s made all its other interest payments on the notes, which were sold to investors in November 2009, he said.
CreditSights Inc. earlier this week maintained its underperform recommendation on Bumi’s notes, with a high-yield analyst at the debt researcher, Sandra Chow, saying “nobody really knows what’s going on there, whether they are genuinely out of cash and trying to buy some time.” Distressed debt from Indonesia has fallen 14.9 percent this quarter, the worst performance in an index of 17 developing nations tracked by Bank of America Merrill Lynch.
The 2016 bonds advanced to 41.744 cents on the dollar as of 5:04 p.m. in Hong Kong, after touching 41.122 cents earlier in the day. Yields dropped 75 basis points to 61.397 percent, having risen as high as 70.030 percent on May 13.
Bumi Resources is also near to completing a $1.3 billion debt deal with China Investment Corp. and may close the transaction next week, Srivastava said.
The Jakarta-based company plans to sell as many as 26.17 billion of new shares in rights offer next month and will use $150 million of the proceeds to pay part of the loans it owes to China’s sovereign wealth fund, it said in a on May 6 statement.