Indonesia's state-owned oil and gas company Pertamina came back to the US dollar bond market with another large, long-dated fund raising, pricing on May 22 a US$1.5 billion offering.

The Reg S/144A 30-year deal was priced at par with a similar coupon and re-offer yield of 6.45%, or 25bp inside the initial price guidance of 6.70% area. This is equivalent to a spread of 303bp over the US treasuries.

The transaction is the largest 30-year US dollar bond offering from an Asian corporate in the past year. Pertamina last tapped the US dollar bond market in May 2013 with a dual-tranche issue totaling US$3.25 billion that included US$1.625 billion bonds for 30 years. Those bonds paid a coupon of 5.625%.

Before launching the latest transaction, Pertamina had conducted a series of investor update meetings across Asia, London and the US in early April on the occasion of the update of its US$10 billion global medium-term note programme.

Taking into account the strong feedback from investors that it generated during the meetings, the company monitored the market for the right issuance window. That opportunity came on May 22, amid a strong overnight market backdrop, as it announced the new transaction after the Asian lunch break.

With minimal competing supply that afternoon, Pertamina was able to capture the market focus with the order book growing rapidly and reached the US$1.5 billion mark at the London open. With the supplementary demand from European accounts, the order book continued to build at the steady pace and amounted to nearly US$4 billion by the close of business in Asia.

The transaction was supported by large anchor orders from high quality real money accounts and this enabled Pertamina to release the final price guidance of 6.50% area (+/- 5bp), advising the market that it will price in that range. It printed the deal at the tight end of the guidance at 6.45%, allowing the bookrunners - Barclays, Citi and HSBC - to achieve Pertamina's objectives for this financing exercise.

The final demand amounted in excess of US$6 billion from more than 250 accounts, with 48% of the bonds allocated in the US, 27% in Europe and 25% in Asia. By type of investors, asset managers took 75%, insurance companies and pension funds 17%, banks 5%, private banks 2% and sovereign wealth funds 1%.

Proceeds from the offering will be used to fund Pertamina's capital expenditures (capex) and for general corporate purposes.