Mobile operator PT Indosat Tbk (ISAT) is on course to raise a total of Rp 3.46 trillion ($263.7 million) through a bond issuance, with coupons set at between 7.5 per cent and 9.15 per cent. The bonds comprise a regular note of Rp 3.17 trillion ($241 million) and an Islamic bond of Rp 288 billion ($21.9 million).
Indosat management said, a large part of the proceeds will be used to refinance debts from a number of creditors. These lenders include BCA, BNI, BNP Paribas Indonesia, Sarana Multi Infrastruktur, Indonesia Infrastructure Finance, Bank of Tokyo-Mitsubishi UFJ, Bank Mizuho Indonesia, Bank Sumitomo Mitsui Indonesia, and Bank CIMB Niaga.
“The funds gathered from the Islamic note will be used to pay for the spectrum license fees (BHP),” said the management.
The bonds have been assigned the rating of AAA by Fitch Ratings Indonesia. The rating also takes into account the sukuk’s structure and documentation.
“Fitch considers Indosat Ooredoo’s intentions to support its sukuk obligations. Fitch’s rating for the certificates reflects the agency’s belief that Indosat Ooredoo would stand behind its obligations,” said the rating agency in an official release.
Fitch predicts Indosat’s revenue to grow by the mid-single-digits in 2016-2017, with operating EBITDAR margin of around 42% in 2016-2017. Competition is also expected to stabilize as smaller telecom firms focus on profitability.
Indosat posted a net profit of Rp 428.1 billion in the first half this year, compared with a net loss of Rp 733.8 billion in the same period last year. The surge in net profit came from Indosat’s reduced US dollar-denominated debts, from $1.16 billion to $227.5 million.
Revenues during the first six months were booked at Rp 13.94 trillion, up 10.5 per cent compared to Rp 12.62 trillion last year. Meanwhile, EBITDA grew 12.6 percent with a margin of 43.3 per cent.