Lippo trade reflects dearth of quality Indonesian paper

Investors chase Lippo’s bonds despite the aggressive pricing.
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Lippo's Pluit Village mall in affluent north Jakarta
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<div style="text-align: left;"> Lippo's Pluit Village mall in affluent north Jakarta </div>

Indonesian real estate developer Lippo Karawaci last night priced a $150 million seven-year bond a deal that clearly illustrated the dearth of quality Indonesian paper. The company went out with aggressive terms on a weak day and managed to attract $680 million worth of orders from 72 accounts. Meanwhile, its outstanding bonds also tightened sharply in secondary.

The company announced initial price guidance of around 7.25% at noon on Wednesday. From the onset, this looked aggressive compared to the Lippo 2015s, which were yielding 6.91%. Lippo’s new bonds mature in 2019, but are callable after the fourth year.

“Initial guidance of 7.25% seems very tight especially on...

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