www.jakartaglobe.com - Indosat, the country’s second-largest mobile phone operator, plans to sell Rp 2.5 trillion ($272 million) in bonds this year to help fund its business expansion plans and refinance debt.
Indosat, which has about 60 million subscribers, plans to sell fixed-rate conventional bonds and Islamic bonds, the company said in a statement on Tuesday.
Specifically, the company will sell Islamic bonds of the Ijarah type, which investors lease back to the issuers to comply with Islamic law and to avoid receiving interest payments. Ijarah bonds represent the undivided beneficial rights or ownership of the assets held by the trustee on behalf of the investors. (source)
Indosat, which has about 60 million subscribers, plans to sell fixed-rate conventional bonds and Islamic bonds, the company said in a statement on Tuesday.
Specifically, the company will sell Islamic bonds of the Ijarah type, which investors lease back to the issuers to comply with Islamic law and to avoid receiving interest payments. Ijarah bonds represent the undivided beneficial rights or ownership of the assets held by the trustee on behalf of the investors. (source)
Indosat has hired DBS Vickers Securities Indonesia, Danareksa Sekuritas, HSBC Securities Indonesia, Mandiri Sekuritas and Standard Chartered Securities Indonesia as financial advisers for the debt sale.
“Net proceeds from the issuance of Indosat bonds will mainly be used for investment and refinancing of Indosat debt,” the company said in the statement.
The bonds will mature in 10 years, the company added. It did not provide the proportion of conventional bonds and Islamic bonds.
Indosat’s debt received an idAA+ rating from local rating company Pemeringkat Efek Indonesia (Pefindo).
Many Indonesian companies are rushing to tap the debt market to capitalize on low borrowing costs in the country.
Indonesia’s central bank, Bank Indonesia, kept its benchmark rate unchanged at a record low of 5.75 percent last week in a bid to shore up the country’s economic growth.
Indosat did not provide any other terms of the sale, such as the coupon or the price range of the bonds.
The yield of the government’s 10-year bonds were little changed at 6.1025 percent on Tuesday from 6.1027 percent the previous day, according to Indonesia Bond Pricing Agency. Bonds yields move inversely with price.
Indosat sold 2,500 cellular phone towers to a mobile-phone infrastructure provider for $519 million in February this year.
Indosat, like other major Indonesian mobile phone operators Telkomsel and XL Axiata, has shifted its focus this year from voice calls and text messages to broadband business.
Shares of Indosat fell 1 percent to Rp 5,100 on the Indonesia Stock Exchange on Tuesday. They have fallen by 9.7 percent so far this year.
Indosat announced the bond sale after the market closed.
Source: http://www.thejakartaglobe.com/business/indosat-to-fund-expansion-with-rp-25t-bond-sale/512145 - April 17, 2012
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