Indosat increases size of global bond

Indosat increases size of global bond

Dow Jones, Jakarta

PT Indosat, Indonesia's second largest telecommunications company, has raised the size of its global bond to US$300 million from the earlier proposed $200 million, people familiar with the situation told Dow Jones Newswires on Monday.

The company decided to increase the offering following overwhelming response from investors during roadshows in Asia last week, the people said.

As of late Friday, Indosat has "secured over half a billion dollars" of orders for the seven-year bond, one of the people said.

Indosat is currently continuing its marketing tour in London and Los Angeles.

Pricing of the bond is expected to take place on Tuesday, the people said.

Due to the strong demand, Indosat has also tightened the indicative coupon on the bond to 7.75 percent from the originally targeted range of 7.75 percent-8.25 percent, one of the sources said.

The planned bond is part of Indosat's larger refinancing exercise, involving bonds denominated in both U.S. dollars and rupiah, as well as a syndicated rupiah bank loan. Indosat is seeking to raise Rp 2.5 trillion through the rupiah-denominated bond offering.

The company will use the proceeds from both bonds to partly refinance its consolidated debt of around $900 million. Plans to merge its wholly owned cellular units, PT Indosat Mobile Multi Media and PT Satelindo, into the parent company next month will help consolidate the debt of the three companies, making it easier to refinance the borrowing.

Singapore Technologies Telemedia owns a 42 percent stake in Indosat, while the government has 15 percent.

Moody's Investors Service has assigned a (P)B2 rating with a stable outlook on the proposed bonds, while Standard & Poor's Ratings Services rated the bonds B+, also with a stable outlook. -- Dow Jones