Bloomberg News

Bakrie Sumatera Said to Hire Three Banks for $250 Million Loan

June 08, 2011

June 9 (Bloomberg) -- PT Bakrie Sumatera Plantations, the Indonesian plantation company that traces its roots back to 1911, hired three banks to help it borrow $250 million in a five-year term loan, a person familiar with the matter said.

Proceeds will be used to refinance debt, including the company’s $160 million of 10.75 percent notes due in November, the person said, asking not to be identified as the details are private.

The loan, secured against Bakrie’s palm plantation assets, is being structured so that creditors to other parts of the company’s business have no recourse to it, the person said. The Jakarta-based company acquired the Domba Mas Group, a palm oil products maker, in October and agreed to take over about $180 million of bad debt owed to PT Bank Mandiri, the lender said at the time.

The $250 million facility will pay a margin to offshore lenders of 700 basis points more than the London interbank offered rate, rising to 900 basis points after one year, the person said. Onshore lenders will be offered a margin of 800 basis points more than Libor, rising to 1000 basis points, or 10 percentage points, after 12 months, the person said.

Offshore lenders will initially receive an all-in payment, including fees, of around the high 800 basis-point mark, compared with the high 900 basis-point area for onshore lenders, the person said.

PT Bank Internasional Indonesia, Credit Suisse Group AG and Raiffeisen Bank International AG are organizing the facility and syndication to other lenders is expected to be completed in July, the person said.

Bakrie Sumatera is rated Caa1, the fifth-lowest non- investment grade, by Moody’s Investors Service.

--Editors: Edward Johnson, Shelley Smith

To contact the reporter on this story: Katrina Nicholas in Singapore at knicholas2@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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