Indonesian firms Melli Darsa and Hadiputranto, Hadinoto & Partner along with Clifford Chance, Milbank and Linklaters and have worked together on an historic transaction: the first high-yield debt transaction to be sealed in the country since the onset of the financial crisis in 2008.

Under the terms of the deal, PT Matahari Putra Prima Tbk (MPP) — one of Indonesia’s largest retail operators — through its special purpose finance subsidiary Matahari International B.V (MI), issued new 10.75% Senior Notes due 2012. Holders of existing US$150m 9.5% SNs due 2009 received an offer to exchange in the most recent issue. Concurrent with this issue, MI also made a consent fee offer as an incentive to holders of existing notes to vote in favour of certain proposed amendments to the terms and conditions and trust deed of the existing notes. A portion (US$200m) of the exchangeable new notes was placed to new money investors

MPP turned to Milbank for US and English law advice and Hadiputranto, Hadinoto & Partners for local law advice. The banks on the deal, UBS and Citi, used a Clifford Chance team led by partners Crawford Brickley and Joan Janssen while Melli Darsa & Co provided local counsel. The aforementioned banks tapped Linklaters for advice as to Netherlands law.

Clifford Chance’s Brickley says that deal is evidence that the regional rebound of the last few months need not only apply to transactional activity, but is just as visible on the capital markets.

"This transaction marks the welcome reopening of the high-yield debt market in Indonesia, being the first time since the beginning of the global financial crisis that such debt has been issued," he said. "We have seen a steady increase in Indonesian and regional market activity in other transactional sectors, and it is good to see this recovery now extending to the Indonesian capital markets, and to high-yield debt in particular."