Indonesia's Federal Finance says eyes 1 trln rph bond issue

JAKARTA, March 18 (Reuters) - PT Federal International Finance, Indonesia's largest motorcycle-financing firm, said in a statement on Tuesday that it plans to raise 1 trillion rupiah ($108 million) by selling bonds.

Federal -- owned by PT Astra International Tbk (ASII.JK: Quote, Profile, Research, Stock Buzz), the country's largest automotive distributor -- said the bonds would be offered in four tranches, with maturities ranging from 370 days to four years. Proceeds will be used for working capital.

The company, which mainly provides financing for Honda (7267.T: Quote, Profile, Research, Stock Buzz) motorcycles, has not set the coupon for the bonds.

PT Kresna Graha Sekurindo (KREN.JK: Quote, Profile, Research, Stock Buzz), Mandiri Sekuritas, and Indo Premier Securities have been appointed as joint lead underwriters for the bond sale, the firm said.

Indonesia's benchmark interest rate has fallen from 12.75 percent in early 2006 to 8 percent currently, prompting more consumers to turn to financing companies including Federal International Finance and Wahana Ottomitra Multiartha Tbk (WOMF.JK: Quote, Profile, Research, Stock Buzz) to pay for new cars and motorbikes.

Federal said the portion of Honda motorcycle sales which are financed by such loans rose to 67.4 percent in 2007, compared to as low as 16 percent in early 1990s.

Astra controls 50 percent of PT Astra Honda Motor, which makes and distributes Honda motorcycles in Southeast Asia's largest economy.

Astra Honda said last year that it aims to sell a total of 10 million new motorcycles in the next three years, up 40 percent from the previous three-year period.

Motorcycle sales in the world's fourth-most populous nation are expected to top 5 million units this year, compared with 4.7 million units last year. ($1=9,260 Rupiah) (Reporting by Harry Suhartono, editing by Sara Webb)