24 May, 2017
Allen & Overy advised BNP Paribas, Citi, UBS, HSBC, Mandiri and Mizuho Securities as joint bookrunners on PT Saka Energi Indonesia (Saka)’s debut 144A/Reg S offering of USD625 million 4.45% senior notes due 2024. This is Saka’s first USD bond issue into the market.
Saka is an oil and gas exploration and production company and the upstream arm of the state-owned Perusahaan Gas Negara, Indonesia’s largest natural gas transportation and distribution company.
The bond offering is the first in two years by a quasi-sovereign Indonesian issuer, attracting strong investor demand of more than US$4 billion. While Saka’s parent is PGN, the notes did not benefit from a direct guarantee by PGN. Instead of a guarantee, investors received a change-of-control put at 101% if: (i) the government of Indonesia ceases to directly own and control at least 51% of PGN’s shares, plus PGN’s ratings decline if it was investment-grade at such time (a double trigger) or (ii) PGN (or any successor entity) ceases to control Saka and directly or indirectly own at least 51% of Saka’s shares. Further, PGN is expected to continue its substantial financial support of Saka (partly from cross-default risk in PGN’s debt covering material subsidiaries, including Saka).
Commenting on the transaction, Allen & Overy lead partner Amit Singh said: “We were delighted to have represented our clients on this landmark transaction for Saka Energi. This demonstrated not just the strength of our U.S. Securities practice in the region but the integrated offering we offer for our Indonesian clients whereby we combine U.S. Securities and Indonesian law expertise.”
The A&O team was led by partners Amit Singh and Daniel Ginting, with support from counsel Michele Discepola, senior associates Felipe Duque and Mohammad Andrew, associates Deska Widianto and Bryna Djuhar, and trainee Tyas Hardianto.
