Indofood's Rp1 trillion ($116 million) five-year bond issue is likely to yield just 16% when final pricing is decided next week. "The expectation is it will probably turn out mid-market of the range [15.75%-16.25%]," says one of the joint lead underwriters.
He says that domestic investors and the Indonesian arms of foreign insurers showed strong interest during pre-marketing. Overseas players, however, are largely steering clear.
The issue will also now be a straightforward Rp1 trillion bond with no callable tranche. Originally, the company reserved to right to pay down Rp250 million of the issue after one year in the event a planned acquisition failed to materialize.
The bonds, which are rated AA+ by Permeringkat Elek Indonesia (PEFINDO), are likely to be issued in the second week of July.
