Bumi's resourceful exchangeable

Controversial Bakrie group completes one of Asia''s most complicated, innovative and unexpected deals of the year.

Indonesia's Bakrie group returned to the international capital markets yesterday July 19 with a $200 million exchangeable led by JPMorgan. This marks the second time the group has accessed the dollar market in the last month following a $600 million future flow securitization via Merrill Lynch at the end of June.

Both deals represent an attempt to bring down the group's borrowing costs and increase its operational flexibility. More importantly their successful completion signals investors' willingness to re-enter the darker depths of corporate Indonesia provided the return is high enough.

The exchangeable represents an equity divestment by the Bakrie family via its ultimate holding company Long...

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