Indonesia's second largest coal mining contractor PT Bukit Makmur Mandiri Utama (BUMA) today has finally signed agreement of 5 year US$600 million syndicated loan facility from several banks.
A source at one of the lenders said the syndicated loan bears about 7% annual interest rate. "BUMA will use the facility to buyback loans and bonds totaling nearly US$600 million," the source said.
The lenders involving the syndication such as Sumitomo Mitsui Banking Corporation, ING Bank, Bank of Tokyo, and Bank Mandiri.
Morgan Stanley has been mandated by BUMA as buyback arranger.
Referring to BUMA bonds agreement, the company is allowed to redeem the bonds at par when there is change on taxation regulation.
On January, Indonesian Government imposed 20% withholding tax on US$ bonds issuance by Indonesian companies. "BUMA seems to give a sort of sweetener to bond holders," the source said.
Disclosure: No position at the stocks mentioned above.