PT Pertamina, a government-owned energy firm has raised US$1.9 billion from the issuance of yankee bonds - Photo: Privacy

JAKARTA (TheInsiderStories) – PT Pertamina, a government-owned energy firm has raised US$1.9 billion from the issuance of yankee bonds, said the source close to the deal. It said, the bonds are divided into two series with tenure five year worth of $1 billion and yield 1.4 percent.

Then $900 million with term 10 years has yield 2.3 percent. Total orders entered for the two series recorded $4.8 billion or oversubscribed 2.3 times from the initial targets. In detailed, Asia Pacific 50 percent, European, Middle Eastern and African investors 27 percent, also United States and others 23 percent.

Early of this week, the national petroleum company has announced to releases US Dollar-denominated bond under the $20 billion program. The notes get rating BBB from Fitch and Baa2 from Moody’s Investor Service.

Last time Pertamina released the global bond on February 2020, amounted to $750 million also getting Baa2 rating from Moody’s. The proposed US-dollar notes are rated at the same level as Pertamina’ senior unsecured debt as they will constitute its direct, unconditional, un-subordinated and unsecured obligations. The ratings are equalized with those of its parent, Indonesia (BBB/Stable).

Last year, the oil and gas holding has appointed six banks to seek loans in the form of a bridging loans around $3 billion for expansion. The banks are BNP Paribas, Citi, Credit Agricole, MUFG Bank, Societe Generale, and Sumitomo Mitsui Banking Corp.

The CEO, Nicke Widyawati, has stated that Pertamina needs funding around $133 billion until 2026 to boost the production capacity. Of this amount, will be closed through external funding, initial public offering, and project financing about $49 billion.

Last year, she said, the company prepared funds around $6.2 billion for a number of national strategic projects. In addition, she stressed, the company need funds to maintained the upstream production caused the many are old wells. Beside from internal funding, 10 percent of the funds its expecting from project financing, 28 percent from external financing, and 15 percent from equity financing.

Pertamina’ funding options can be from stocks (partnership or initial public offering), debt securities (average tenure 1 – 10 years and limited by debt to equity ratio), and banking (average tenure 4 – 5 years). In September 2020, President Joko Widodo has injected assets worth of Rp2.1 trillion ($148.94 million) to improve the capital structure of the producer.

The policy contained in the government regulation Number 50 Year 2020 on Additional State Capital Participation for the holding firm. The largest injections transferred to Pertamina is the operation of state property in the form of a natural gas distribution network for former households from the directorate general of oil and gas worth of Rp1.3 trillion. The rest in the form of other instruments.

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