The $600 million future flow coal ABS completed in June 2005 by Indonesia's PT Bumi Resources will be redeemed in full on April 28, six years ahead of maturity. The move comes as a result of Bumi selling off the two subsidiaries that produced the coal - PT Kaltim Prima and PT Arutmin - to a consortium led by Renaissance Capital, an Indonesian Bank.
In many ways, the early redemption is disappointing news as the transaction has performed well and served as a prime example of the benefits of securitization to companies in Southeast Asia.
IndoCoal Exports, arranged by Merrill Lynch, was the first ABS from Indonesia since the Asian Financial Crisis of 1997. Structured with numerous safeguards to protect investors from borrower and sovereign risks, the deal was a rarity in attracting praise even from banks not involved.
Consequently, the transaction was an obvious choice for ASR's Asian deal of the year award for 2005 (ASR, 01/09/06).
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