Lippo Karawaci price US$270 million bonds at level 9%

PT Lippo Karawaci Tbk, Indonesia's biggestpublicly traded real estate developer, priced $270.6 million of 2015 bonds to yield 9%. The US$270.6 million bonds sell by Citigroup Global Markets Singapore Pte. Ltd. and Deutche Bank AG, Singapore branch as joint lead managers.

The company appointed Ciptadana as financial advisor, Makes & Partners and Melli Darsa & Co as the legal advisors.

Lippo Karawaci also appointed Milbank, Tweed, Hadley & McCloy LLP dan Shearman & Sterling (London) LLP as a legal international advisors.

The notes, were issued in exchange for Lippo's $250 million of 8.875 percent bonds due 2011. The company received demand amounting to $650 million, the company said in a press statement.

Global bond of Lippo Karawaci which will be issued by the subsidiary firm has got B+ and B1 rating from two international rating companies. The bonds that issued by Sigma Ca­pital Pte Ltd.

The review of emitter and bond rating from two rating companies, the Fitch Ratings and Moody's Investors Service, completed the rating review which was formerly set by the Standard&Poor's (S&P). S&P gave the bond rating of one of the Lippo Group firms at the level of B.
In the research released, Fitch set the stable level prospect and long term national rating at the level of BBB+(idn). Fitch also gave similar rating and recovery rating at the level RR4 to Lippo Karawaci Finance BV.
Fitch considered the natural cycle of property development in Indonesia is one of the factors limiting the corporate bond rating.
The corporate cash flow comes from health, city infrastructure, property, and portfolio management business could mitigate the corporate risks. Fitch also considered the split of large scale projects in some phases could minimize the project failure risks.