Indofood redeems bonds, lowers financing costs

After years of back-and-forth wrangling, Indofood says it will redeem $143.7 million in bonds, which will help the noodle-maker's books look stronger.
IndonesiaÆs largest food business by sales, Indofood Sukses Makmur, announced on Monday (May 15) it has reached an agreement with bondholders to redeem $143 7 million worth of outstanding bonds before their maturity in 2007

The redemption, which will take place on June 12, covers the outstanding principal together with the interest accrued up to and including that date It will be financed by bridging loans and internal cash generation

The early redemption will help reduce the company's financing costs, explains Erwan Teguh Teh, an analyst at PT Danareksa Sekuritas He points out that the bridging loan is at SIBOR plus 1 5%

It offers "cheaper new funding and less restrictions on the new covenants,"...
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