By Susanna Moon
Chicago, May 10 - Asian Plantations Ltd. said it completed the first tranche of RM 100 million of notes via Maybank Investment Bank Bhd.
The company expects to issue about RM 255 million of notes with various maturities ranging up to 10 years, according to a company press release. The medium-term notes program is unconditionally guaranteed by Maybank.
The initial tranche is composed of a RM 65 million 6.1% 10-year note and a RM35 million 6% nine-year note.
The interest rate represents a 244 basis-point premium for the nine-year tranche over the equivalent nine-year Malaysian government securities, currently trading at 3.56%, and a 252 bps premium over the equivalent 10-year government notes trading at 3.58%, the release noted.
Proceeds will be used for funding the company's plantation development, construction of the crushing mill and general working capital purposes.
The remaining tranches of the MTN program are expected to be issued during the course of 2012 and 2013.
The notes program "diversifies the company's funding sources," Dennis Melka, the company's joint chief executive officer, said in the release, noting that the "tight credit spread reflects the current asset value of the company and its strong projected free cash flow in the years ahead."
The palm oil plantation company is based in Singapore.
| Issuer: | Asian Plantations Ltd.
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| Issue: | Notes
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| Amount: | RM 100 million
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| Underwriter: | Maybank Investment Bank Bhd.
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| Settlement date: | May 10
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| 10-year notes
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| Amount: | RM 65 million
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| Maturity: | 2022
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| Coupon: | 6.1%
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| Nine-year notes
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| Amount: | RM 35 million
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| Maturity: | 2021
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| Coupon: | 6%
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