PT Bumi Serpong Damai Tbk Issues US$ 225 Million Global Bonds in SGX.

May 13, 2015

Capital Markets & Securities


Background

PT Bumi Serpong Damai TBK, known as BSD, is the largest listed developer on the Indonesia Stock Exchange by market capitalization.  The company and its subsidiaries are engaged in development, management and operation of residential townships, condominium towers, office buildings, retail malls and hotel properties.  BSD has presences in nine cities across Indonesia and is currently investing in three new projects across Jakarta and one residential project in East Kalimantan.  The four new projects are expected to help the company meet its marketing sales target of Rp 7.5 trillion, up by around 15 percent from the Rp 6.5 trillion recorded in 2014.

 

The Bonds.

The greater bulk of financing has been derived from sales proceed with some external financing in the leverage.  MDC was appointed by BSD as the Indonesian legal counsel to advice on the overall transaction from an Indonesian legal perspective.  Citi and UBS was appointed as the book runners in managing the bonds. The property company will use the funds to finance land acquisition and project development. Listed in the Singapore Stock Exchange (SGX), the bond has maturity in 2020 with a coupon rate of 6.75 %.

 

Result

 Through its wholly owned subsidiary Global Prime Capital Pte ltd, BSD successfully issued the global bonds which amounted to US $ 225 million. The company low leverage and healthy cash reserves, which had exceeded its debt during 2008-2013, had earned it a final rating of BB- from Fitch Ratings.  Company earnings before interest, taxes, depreciation and amortization (EBITDA) by end of 2014 showed a margin of 50 percent, which is strong compared to its regional and domestic peers. Fitch expects the company to maintain an EBITDA margin of more than 40 percent over the medium term.  Moody, who had never previously issued a rating for BSD and its subsidiaries, had issued a rating of Ba3.  PT Bumi Serpong Damai Tbk has posted a USD 170 million profit in Q1 2015.