Release

The Synergy
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Release
August 2, 2017

Investor’s Demand for ABM Investama's Global Bonds Reaches US$ 1.1 Billion

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Jakarta, August 2, 2017 - PT ABM Investama Tbk. (Ticker code; ABMM) has set US$ 300 million global bond issuance with a duration of 5 years. The U.S. Dollar-denominated bonds, which were debut issuer by ABM, offer 7.125% coupons with a coupon payment term of two times per year. The global bonds were effective as of August 1, 2017 and due to mature on August 1, 2022.

ABM Investama CEO Andi Djajanegara explained that the value of the global bond issuance is set at US$ 300 million, proportionate to the company’s current needs although demand from global investors is oversubscribed by US$ 1.1 billion. ABM offers the global bonds to investors in Asia, Europe and the United States.

“We are very surprised to receive investor’s strong response to our first ABM global bonds issuance. This level of trust from the investors shows that the business model we apply is seen to be positive and consider to result in an excellent performance,” Andi Djajanegara explained in Jakarta, (2/8).

Andi added that investors’ interest in ABM’s global bonds is in line with the trust of several global rating agencies which have given positive ratings to ABM’s global bonds. Fitch Ratings has given “BB-“ ratings with steady outlook; Moody’s gave Ba3 ratings, also with a steady outlook. This marks the first time the two rating agencies rated ABM.

In a statement, Fitch explained that the BB- ratings given to ABM is a reflection of ABM’s solid operating performance and ABM’s position as an integrated mining company. Aside from operating mines, ABM is also supported by the coal mine contractor business which is very competitive and has the fourth highest contract value in Indonesia.

“The Ba3 rating reflects ABM’s track record of maintaining a strong performance through the cycle, supported by its integrated operations and focus on costs,” says Saranga Ranasinghe, a Moody’s Assistant Vice President and Analyst.

“The rating also takes into consideration ABM’s moderate financial profile, supported by its prudent capital management and resilient performance during the recent downturn in coal prices,” adds Ranasinghe.

ABM Investama CFO Adrian Erlangga said that the proceeds from the global bond issuance will be used to pay off all of ABM Investama’s banking loans in line with the company’s efforts to curtail protracted debts.

“Moving forward, acquiring coal mines that are ready to produce becomes one of the key priorities of the Company, considering that mines are the enabler of the synergy between ABM’s subsidiaries,” Adrian said.

In 2017 ABM’s focus is to continue to strengthen its balance sheet by trimming down debt and improving utilization and productivity of assets as well as strengthening synergy among subsidiaries. With stronger capital structure, ABM is expected to be more resilient in weathering many different business situations, especially in facing volatile coal commodity market conditions.