Content area
Full text
The success of Asia Pulp & Paper's $405 million bond offering to finance its China operations is a great coup for the company and a landmark for Asian debt financing, as the first bond out of Indonesia since the region's economic crisis,
APP was perhaps the most obvious candidate to do this. Although it is known as an Indonesian company, it is actually headquartered in Singapore and listed in New York. "The APP China bond is of course a Chinese obligor guaranteed by a Singapore entity with assets in Indonesia and China," says Aaron Holsberg, a senior analyst for international pulp and paper at Chase Securities in New York.
A frequent issuer in the past, APP is Asia's biggest pulp and paper producer. To date, 80%. of its operations have been for export and 10% foreign-based, with all costs, prices and commodities denominated in dollars. Put together, this has allowed it to survive the Asian crisis intact, which allowed...