Market to wait a while longer for Tenaga's debt tender

Having initially expected presentations to begin in Hong Kong yesterday (Wednesday), investors say that they are not now likely until the week after next since there has been no sign of an SEC filing. HSBC and Lehman Brothers are said to be joint lead managers of a simultaneous tender offer and new bond issue for the Malaysian electricity utility.

Investors canvassed about the tender report that the Baa3/BBB-rated credit is planning to include its $600 million 7.875% June 2004 bonds and its $300 million 7.2% April 2007 put April 2002 bonds. Since the company is trying to term out and ultimately reduce its foreign currency denominated debt, it will not want to raise new money and is thought likely to cap the new issue at $900 million. Analysts also say that because of Malaysia's currency devaluation in 1998, which pegged the ringgit at M$3.8 to the dollar, Tenaga is particularly keen to avoid redeeming the 2002 bonds, although it has provisioned for any potential foreign exchange loss.