JAKARTA (TheInsiderStories) – State firm, PT Indonesia Infrastructure Finance (IIF) released local bonds Rp1.5 trillion (US$107.14million) today (11/25) to expand their infrastructure financing. The book-building scheduled on Dec. 13 – 16 and to be listing on Indonesia Stock Exchange (IDX) on Dec. 19.
President Director of IIF Reynaldi Hermansjah elaboretad, the bonds consist of three series. Series A has tenure of 370 days and interest rate between 6.35 – 6.95 percent. Series B with three years tenured with indicative price at 7.2 – 7.8 percent and Series C with five years tenure offered at 7.5 – 8.2 percent.
IIF has appointed PT CGS – CIMB Sekuritas Indonesia, PT Danareksa Sekuritas, PT Mandiri Sekuritas, PT Indo Premier Sekuritas, and PT Trimegah Sekuritas Indonesia as the joint lead underwriters. The bond get rating AAA from PT Pemeringkat Efek Indonesia.
The unit of PT Sarana Multi Infrastruktur (SMI) will use the funds to help the financing of national infrastructure projects, which is need funds Rp6,000 trillion. Beside SMI, the lender also supported by International Finance Corporation, Asian Development Bank, Deutsche Investitions-und Entwicklungsgesellschaft mbH, and Sumitomo Mitsui Banking Corp., to run the business.
Recently, IIF provided Cash Deficiency Support Rp600 million to unit of PT Waskita Toll Road(WTR). This facility will be used to support the development of Pemalang – Batang toll road in Central Java.
The facility has a period of 18.5 years since the signing date or five years from the repayment date and have a grace period 13.5 years. During the grace period, the debtor bears interest at 3 percent in cash and a deferred interest at the Deposit Insurance Corporation rate plus 4.25 percent. The interest will be paid after the end of the grace period.
According to IIF’ president director Reynaldi Hermansjah, the provision of these facilities is in line with the company’ mandate as a catalyst for infrastructure financing in Indonesia. Through this facility e issuance of new CDS products that allows toll road operators to meet the cash requirements for new toll road sections that are operating.
Earlier, The Asian Development Bank (ADB) approved a $100 million financial intermediary loan to Indonesia, to help catalyze private sector investments in infrastructure projects.
“The loan will help mobilize private sector investments to develop and finance much-needed infrastructure projects,” said ADB Country Director for Indonesia Winfried F. Wicklein recently.
Indonesia’ infrastructure financing gap remains significant, with annual investment needs estimated to be more than $70 billion, said the Bank. Accelerating infrastructure development is a development priority of the Indonesian government.
Under the Leveraging Private Infrastructure Investment Project, the government will on lend the ADB loan proceeds to IIF and SMI. Both companies are important institutions in Indonesia’ infrastructure financing landscape, that provide project finance, advisory services, guarantees, and project development support to infrastructure projects.
With ADB’ assistance, IIF will lend at commercial terms to infrastructure projects adhering to the institution’ and ADB’ standards and guidelines. The loan will support projects in health, renewable energy, telecommunication and transportation sectors.
“ADB’ assistance is anticipated to leverage a multiple of the loan amount in the form of additional private sector investments in important infrastructure projects and in doing so help deliver value for money to the government,” said ADB Country Economist Mr. Yurendra Basnett.
IDX noted there are still 13 companies that will issue bonds until the end of 2019. The potential funds from 13 companies’ bonds reached Rp18.22 trillion.
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