REPUBLIKA.CO.ID, JAKARTA -- State fertilizer producer PT Pupuk Indonesia plans to issue bonds worth Rp3.7 trillion in 2014, to expand its business and strengthen the capital of its subsidiaries.

In its prospectus released on Tuesday, the company said 41 percent of the proceeds from the issuance of the bonds will be used to provide loans to PT Pupuk Iskandar Muda to repay its bank debts and 32 percent will be given as loans to PT Pupuk Kalimantan Timur to develop its business and strengthen its working capital.

Eight percent will be given as loans to PT Pupuk Indonesia Logistik to develop its logistic and commercial businesses and 12 percent will be used to form a new business entity to engage in the energy business.

The bonds will consist of two series, which will be issued at a coupon of 9.25 percent to 10.25 percent.

The bonds series A, which will be issued at a coupon of 9.25-10 percent, will mature in three years, while the bonds series B, which will be issued at a coupon of 9.75-10.25 percent, will mature in five years.

Local rating agency PT Fitch Rating Indonesia has assigned its AAA-idn (triple A) rating for the bonds.

PT Pupuk Indonesia and its bond issue underwriter have planned book building for the bonds on June 16-24, 2014. The bonds will be on sale from July 2 to July 3 and listed on the Indonesia Stock Exchange on July 10, 2014.

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