After sealing US$1.9 billion of very expensive new loan from China Investment Corporation (CIC), Bumi is underway to issue around US$500 million of high yield bond with a hope can get the same yield as low as dolar bond of its fiercest contender PT Adaro Indonesia.
According to a source familiar to the matter, Bumi has designated Credit Suisse, a darling investment bank, and Deutsche Bank, an instituition which advised CIC providing US$1.9 billion of debt. "Bumi hopes that it can get a yield level as low as Adaro bonds [7.625%]. But, I think it will be tough for Bumi, considering GCG concern," a source said.
According to a source familiar to the matter, Bumi has designated Credit Suisse, a darling investment bank, and Deutsche Bank, an instituition which advised CIC providing US$1.9 billion of debt. "Bumi hopes that it can get a yield level as low as Adaro bonds [7.625%]. But, I think it will be tough for Bumi, considering GCG concern," a source said.
Bumi paid US$1.7 billion of a chaper debt using CIC's loan which burdens 12% of annual interest rate and 19% of IRR. Credit Suisse debt fasilities are gone, leaving Rio Tinto's loan in Bumi's book. Rights issue is not a primary option for Bumi. But, still it will be considered," a source said.
In fact, someone who helped Bumi to secure CIC's loan recommends to sell Bumi shares. Did his recommendation sign that Bumi has a big problem to repay its debt?
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