Indosat to use bond yields to expand business

Indosat to use bond yields to expand business

JAKARTA (JP): State-owned telecommunications company PT
Indosat will use a larger proportion of proceeds from the
issuance of its Rp 1.5 trillion (about US$158 million) bonds to
expand its cellular business in Indonesia, a senior executive
said on Monday.

Indosat executive vice president for corporate development
Budi Prasetyo said that 35 percent of the proceeds of the five-
year bonds worth Rp 1.5 trillion would go to the development of
its DCS-1800 global system for mobile communications network.

Indosat planned to offer the bonds in the primary market
between April 3 and April 5, and list them at the Surabaya Stock
Exchange on April 17, he said.

Budi said that the five-year bonds would be issued in two
series -- A-series and B-series -- carrying different interest
rates.

The coupon yields of the A-series bond will be fixed at
interest rates ranging between 17.5 percent and 18.5 percent for
the five years.

The coupon yields of the B-series bond will be based on the
combination of fixed and floating interest. In the first year,
the interest rate will be fixed at between 17.5 percent and 18.5
percent. For the remaining four years, the yields will be floated
at 2.5 percentage points above the average interest rate of
three-month time deposits at four local banks, he said.

The three banks are Bank Mandiri, Bank Central Asia (BCA),
bank Danamon and Bank BNI, Budi said.

Local rating body PT Pemeringkat Efek Indonesia has rated the
bonds as id AA+.

The remaining proceeds will go to the development of Indosat's
domestic network (26 percent), the development of international
direct dial (IDD) services and quality as well as other value-
added services (23 percent), the development of its Internet and
multimedia infrastructure (10 percent), and to the development of
Indosat's international marine cable communications system (6
percent). (tnt)