PLN raises $1.25 billion with 10-year bond issue

PT Perusahaan Listrik Negara (PLN), Indonesia's state-owned electricity company, raised $1.25 billion on Friday through its second international bond issue this year.

The issuer of the senior, unsecured 10-year notes is a Singapore special purpose vehicle (SPV) called Majapahit Holding BV, which is guaranteed by Perusahaan Perseroan (Persero) PT Perusahaan Listrik Negara. The issue pays a semi-annual coupon of 7.75% and was re-offered at 99.152 to yield 7.875% to a maturity date of January 20, 2020. Initial price guidance late last week had been for an 8% yield.

The coupon and launch yield are both one-eighth of a percentage point higher than that offered on last month's $800 million 10-year deal from Adaro, Indonesia's second biggest coal miner. Adaro is rated Ba1 and BB+ by Moody's and Fitch respectively.

The yield on the PLN bonds translated into a spread of 445.1 basis points over the benchmark US Treasury yield. In August, the company paid an 8.125% yield for a $750 million 10-year bond issue, just scraping inside 450bp over the government yield. So, in absolute terms the new bonds were 25bp tighter, more-or-less flat on a relative basis to where the August deal was priced, and, according to people familiar with the launch, 17.5bp back from where the older issue was trading on Friday.