03/04/2013 (Jakarta Globe) - Sinar Mas Multifinance, the financing unit of Sinar Mas Group, has cut its planned bond sale by half and set the coupon on its planned bonds at 10.75 percent.

The firm plans to raise Rp 500 billion ($40 million) from the sale of five-year bonds later this week instead of the planned Rp 1 trillion it announced in March , Sinar Mas said in a brief prospectus published in Investor Daily on Monday.

The company did not give any reason for the cut in the size of the note sale.

The privately held Sinar Mas Multifinance is offering the notes to investors from today until Thursday and on April 11 will list them on the Indonesia Stock Exchange. The company, which hopes to boost working capital from the sale, has hired Sinarmas Sekuritas to help arrange it.

Sinar Mas’s bond coupon is higher than that of government bonds of comparable maturities. The coupon of corporate bonds is typically higher than government notes to reflect the risk of holding such bonds.

The yield of government bonds was at 4.9265 percent on Monday, according to data from the Indonesia Bond Pricing Agency.

Many Indonesian companies are now rushing to the debt market to finance their expansion plans, capitalizing on low borrowing costs.

Bank Indonesia kept its benchmark rate unchanged at record low of 5.75 percent last month in an effort to spur economic growth.

Bank Tabungan Negara, a state mortgage lender, has flagged its plan to raise Rp 2 trillion from bond sales later this month as it seeks funds to boost lending. BTN has been distributing home loans.

Sinar Mas Multifinance bankrolls consumer purchases such as for motorcycles and cars.

Its total assets as of December 2011, the latest figures available, stood at Rp 1.53 trillion.