Buma's three-tranche rupiah bond offering oversubscribed 1.4x

Coal mining contractor Bukit Makmur Mandiri Utama (Buma) raised Rp1trn (US$65m) from a three-tranche bond offering which was oversubscribed by 1.4x in just a few days, according to a press release.

The company was able to get "greater investor commitments for longer-term tenors, enhancing the company's ability to effectively manage its debt maturity profile," it said in a release.

The company raised Rp251.04bn from a 370-day tranche at 7.25%, Rp332.71bn from a three-year piece at 9.25% and Rp416.26bn from a five-year portion at 9.75%.

"Investors that purchased the bond included a wide range of reputable pension funds, mutual funds, insurance companies, asset managers, and banks," the company said.

"With a greater proportion of investors committing to longer-term tenors, including an anchor investor committing to the five-year tenor, Buma is well-positioned to align its financing strategy with its equipment lifespan."

Pefindo and Fitch have both assigned A+ ratings to the notes.

BNI Sekuritas and Trimegah Sekuritas were the lead underwriters.

Around 42% of the bond proceeds will be used to repay Rp422bn of bonds issued in 2023 which are maturing this year, 29% for capital expenditure for the purchase of heavy equipment and the rest as working capital for operations in Indonesia and Australia.

The funds raised will be used to drive growth, including increasing capital for business development and strengthening operational efficiency.

Source : ifre.com