Sep 29, 2010

CS, Deutsche, and JP help BUMI bonds

Indonesia's largest coal miner PT Bumi Resources Tbk (BUMI) today launches proposed US$ denominated bonds.
A source familiar with the matter said the company has mandated Credit Suisse (CS), Deutsche Bank, and J.P.Morgan. 
In a recent notes issued by JP Morgan, Bumi plans to raise up to US$300 million to repay its two convertible bonds that are puttable for a total of around US$430 million before the year end.
"We believe that this should be credit positive for Bumi. If the company is successful in raising the full US$300 million, it would go a long way to address Bumi’s refinancing risk," said Asia Credit Roundup report published by J.P.Morgan.
Moody's Investors Service has today assigned a provisional (P)Ba3 senior secured bond rating to the senior, secured US-dollar notes issued by Bumi Investment Pte Ltd and wholly owned and unconditionally and irrevocably guaranteed by PT Bumi Resources Tbk (rated Ba3/negative).
The outlook on the rating is negative. The proceeds of the bonds will be deployed toward debt refinancing at the Bumi level hence there will be no incremental increase in leverage.
Moody's expects to affirm the bond rating and remove it from provisional status upon the closing of the bond issue and review of final terms. The proposed bond will rank pari passu with all existing rated indebtedness. 

Disclosure: No position at the stock mentioned above. 

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