Indonesia loan house

IFR Asia Awards 2014
3 min read
Prakash Chakravarti

Despite currency volatility, as well as macroeconomic and political headwinds, Indonesia yielded a diverse range of syndicated loans in 2014. Credit Suisse underwrote the financings on a sole basis to distinguish itself from peers, introducing new credits to the market and distributing the risk to a wide range of investors.

The Swiss bank stood out with a focused approach that helped it to top the league tables with six deals totalling US$1.11bn, representing a 10% market share in the country. Credit Suisse’s ability to bag sole mandates and syndicate deals for both debut borrowers and difficult credits was key to its performance as rivals grappled with top-heavy syndications or club deals.

Syndicating loans to non-bank investors is Credit Suisse’s forte, and the bank raised more than US$650m from around 25 institutional investors across a variety of deals. It was sole bookrunner on a US$350m 18-month acquisition loan for home-grown conglomerate Rajawali Corpora, backing the privatisation of AIM-listed gold miner Archipelago Resources, which closed in August with a handful of banks and institutional investors participating.

The bank sealed another US$235m 18-month acquisition loan in September to finance Rajawali’s acquisition of a 50% stake in Green Eagle Plantations, a joint venture between the Indonesian group and global agricultural commodities trader Louis Dreyfus Commodities. Banks and institutional investors joined the loan, which was one of the largest subordinated facilities from South-East Asia.

In September, Credit Suisse also won a joint mandate on a loan of up to US$225m for Indonesian upstream oil-and-gas company Energi Mega Persada, split across senior and junior tranches.

Besides, Credit Suisse led an eye-catching US$230m four-year refinancing for Indonesian media company and Bakrie Group unit Visi Media Asia that offered market participants something out of the ordinary. Credit Suisse prefunded the loan in late 2013 and syndicated it to a mix of banks and non-bank lenders that were drawn to the juicy returns. The loan had a put option for lenders at the end of the third year and also offered a redemption premium, which increased the total returns of 16% to 18.66% for participating lenders.

The bank also showed its ability to win repeat business from clients, bagging a lead role on the US$1.275bn financing for Indonesian conglomerate CT Corp, which is IFR Asia’s Loan of the Year. The Swiss lender was one of four banks leading the transaction, which began in November 2013 and closed successfully in March with another 28 banks.

The deal was Credit Suisse’s eighth in five years for the heavily banked company.

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