Sunday, March 4, 2012

Pertamina deal creates flap with large asset managers

HONG KONG (REUTERS) - Indonesia's Pertamina is causing a stir among large asset managers with plans for a global US$1 billion (S$1.3 billion) to US$2 billion deal that's expected to be announced next week.
The state-owned energy company is aiming to capitalise on investor hunger for exposure to Asia's newest member of the investment grade club. But the deal may touch on a thorny limit for large United States (US) asset managers, which are not permitted to buy bonds with high-dollar prices.
Pertamina is expected to tap the 30-year bond issued last year and monetise a 12 point rally. The 30-year benchmark was priced in May at 98.38 and was quoted last week at 111.00. The company is also expected to create a new 10-year bond.
'Generally tapping is not a welcome enterprise and to reopen a seasoned issue which is now over six months old is even worse and would just be really poor form,' said the manager for a large US asset manager in Hong Kong.

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