The darling coal miner for Bakrie Group PT Bumi Resources is going to enroll global debt market next week to sell US$500 million of guaranteed senior secured notes by its wholly owned subsidiary Bumi Capital Pte.
A source familiar with the matter said Bumi will initiate to offer US$500 million bonds to investor. The notes are upsizeable when a deluged demand is available.
Standard & Poor's Ratings Services today assigned BB rating to the proposed issue of the notes. Bumi is the largest producer and exporter of thermal coal in Indonesia. In 2008, Bumi produced over 25% of the country's total coal.
The ratings on the proposed notes reflect the irrevocable and unconditional guarantee by Bumi. The notes rank pari passu with other debt which primarily comprises convertible bonds and a US$1.9 billion loan from the China Investment Corp.
The ratings on the proposed notes reflect the irrevocable and unconditional guarantee by Bumi. The notes rank pari passu with other debt which primarily comprises convertible bonds and a US$1.9 billion loan from the China Investment Corp.
The issue rating is the same as Bumi's issuer credit rating of BB, as Standard & Poor's believes that the purely operational liabilities at Bumi's coal subsidiaries are unlikely to cause any structural subordination at Bumi, because of the company's strong mechanism to control cash flows.
The rating on Bumi reflects the company's exposure to regulatory risks. Bumi's coal mines are still exposed to Indonesia's evolving regulatory framework relating to taxation, contract mining and the environment.
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