Indosat plans Rp 1.75t bond

Indosat plans Rp 1.75t bond

JAKARTA: Indonesia's second-largest telecommunications company PT Indonesian Satellite Corp. On Monday said it's planning to sell Rp 1.75 trillion (US$207 million) worth of bonds to local investors later this year to refinance the debt of cellular unit PT Satellite Palapa Indonesia, or Satelindo.

The amount is less than the Rp 3 trillion Indosat mentioned previously. The company's brief statement didn't explain the smaller offering; company officials couldn't be immediately reached for comment.

The new bonds will carry maturities of five and seven years. PT Andalan Artha Advisindo, PT ING Securities Indonesia will jointly lead underwrite the issue. The timing and coupon rates haven't yet been finalized, Indosat said.

It said the local bond issue would allow the company to extend its loan tenors, take advantage of the low interest rate environment, and reduce risks stemming from exposure to foreign currency and interest rate fluctuations.

Besides the rupiah bond issue, Indosat officials have said the company also plans to offer up to $300 million in international bonds later this year to refinance some of the $900 million debt coming due.

The company's debt load increased in 2002 when it bought Satelindo, the nation's second-largest cellphone company. Much of Satelindo's $360 million debt is in short-term borrowings, including bonds and bank loans. -- Dow Jones