Indonesia’s Star Energy and Alam Sutera Realty Plan Dollar DebtTanya Angerer
Star Energy Geothermal (Wayang Windu) Ltd., PT Alam Sutera Realty, PT Bank Rakyat Indonesia and Filinvest Development Corp. are marketing dollar-denominated bonds. Debt risk in Asia fell.
Star Energy, an operator of geothermal power stations in Indonesia, is offering seven-year notes at a yield of about 6.625 percent, said a person familiar with the matter, asking not to be identified because the matter is private. Bank Rakyat is planning a five-year bond at a yield of around 3.375 percent and Alam Sutera, the Jakarta-based property developer, is selling a seven-year security at about 7.625 percent, other people said. The cost of insuring bonds in Asia from non-payment with credit-default swaps dropped, according to Royal Bank of Scotland Group Plc prices.
The Indonesian borrowers are marketing the notes after the country’s government announced that it had hired three banks to arrange a dollar note sale in February, according to Robert Pakpahan, a director general at the Finance Ministry’s debt management office. Dollar borrowing costs in Asia outside Japan fell 14 basis points to 3.59 percent on March 20 from this year’s high of 3.73 percent on Feb. 6, according to HSBC Holdings Plc indexes.
“Like most corporates globally, many Indonesian issuers are finding the current U.S. dollar funding conditions too hard to resist,” said Mark Reade, a Hong Kong-based credit desk analyst at Credit Agricole CIB. “Corporates throughout the region are rushing to lock in funding ahead of the Easter break and Indonesian corporates are no exception”
Filinvest, the Manila-based holding company with investments in property and banking, is in the market with a seven-year note at a yield of about 4.5 percent.
SmarTone Telecommunications Holdings Ltd., the wireless carrier controlled by Sun Hung Kai Properties Ltd., and Hong Kong-based Yuexiu Real Estate Investment Trust are both planning debut public bonds in the U.S. currency, according to a company statement and a person familiar with the matter.
The latest version of the Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan fell 2 basis points to 118 as of 8:21 a.m. in Hong Kong, RBS prices show.
The new Series 19 Markit iTraxx Japan series, which started trading today, was at 100 basis points as of 9:26 a.m. in Tokyo, according to Citigroup Inc. prices. That compares with a closing price of 105.84 basis points for the previous series on March 19, before a public holiday in the country yesterday, according to data provider CMA. Series 18 was at 103.5 basis points today, according to Citigroup.
Contracts on Ricoh Co. and Sumitomo Chemical Co. were added to the Japan series, with Sharp Corp. and Mitsui & Co. removed, Markit said in a statement on its website.
Fresh versions of the benchmarks are created every six months when companies are added or dropped depending on their ratings, cost of protection and ease of trading. The maturity date of the new indexes is June 2018, compared with December 2017 on the Series 18 versions.
The new Markit iTraxx Australia series fell 3.5 basis points to 119.25 as of 11:26 a.m. in Sydney, according to Westpac Banking Corp. prices. That compares with a closing price of 106.97 basis points for the previous series yesterday, according to data provider CMA. Series 18 was at 104.75 basis points today, according to Westpac.
The previous Markit iTraxx Asia series was at 102 basis points today, RBS prices show, after closing at 103.2 basis points yesterday, according to CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.