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JAKARTA. Publicly listed telecommunications firm PT Indosat has decided to buy back all of its US$650 million-bonds, which mature in 2020, this year, in a move to significantly reduce its US dollar exposure.
“We may exercise the call option as of July 29 this year. We already have the required funds to call back the whole $650 million in bonds,” Indosat spokesman Andromeda H. Tristanto said on Monday.
Indosat had already secured US-denominated credit facilities worth $500 million and rupiah-denominated loans worth $150 million, he told The Jakarta Post.
Andromeda said that the local currency denominated debts comprised both bank loans and bonds.
Besides the Rp 2.5 trillion ($190.3 million) bonds issued last year and another Rp 3.1 trillion ($236 million) now in the pipeline, Indosat would issue another amount of bonds in the second half of this year to further refinance its US dollar-denominated loans, including the $500 million-credit facilities, he said.
The firm’s total US dollar-denominated liabilities have hit $850 million, accounting for around half of its total liabilities, which hit Rp 39.06 trillion as of December last year.
Indosat aimed to make its US dollar- and rupiah-denominated liabilities stand at around a 30:70 ratio, Andromeda said.
The firm, which had 66.5 million subscribers in the first quarter of this year, had secured a permit from the Financial Services Authority (OJK) to issue Rp 10 trillion sustaining bonds for a period of two years, with Rp 2.5 trillion being issued late last year.
This month, the firm aims to raise another Rp 3.1 trillion, of which about Rp 2.6 trillion will be from the issuance of conventional bonds and Rp 416 billion from Islamic bonds, according to its announcement submitted to the Indonesia Stock Exchange (IDX) last Friday.
The bonds will be issued in a different series, with coupon payments being made quarterly.
The conventional bonds’ Series A (Rp 554 billion) has a coupon rate of 8.55 percent per year, Series B (Rp 782 billion) has 9.25 percent, Series C (Rp 584 billion) has 10 percent, Series D (Rp 337 billion) has 10.25 percent and Series E (Rp 427 billion) has 10.4 percent.
Meanwhile, the Islamic bonds consist of Series A (Rp 55 billion), Series B (Rp 76 billion), Series C (Rp 67 billion), Series D (Rp 43 billion) and Series E (Rp 175 billion).
The bond offering will take place on May 28-29.
Indosat is scheduled to list the bonds on the IDX on June 5 and it has appointed Bank Central Asia (BCA) Sekuritas, Bank Negara Indonesia (BNI) Securities, CIMB Securities Indonesia, HSBC Securities Indonesia, DBS Vickers Security Indonesia and Indo Premier Securities as underwriters for the bond sales.
Ratings agency PT Fitch Ratings Indonesia and PT Pemeringkat Efek Indonesia (Pefindo) have assigned triple A and triple A sharia ratings to the firm’s conventional and Islamic bonds, respectively.
“Indosat will use the funds raised from the issuance of Rp 2.864 trillion in conventional bonds for debt refinancing and Rp 416 billion-Islamic bonds for paying concession fees for telecommunications services,” the firm said in a statement. (Khoirul Amin)
