MTEL - To issue a total of IDR3.0 tn in bonds and sukuk for debt repayment

MTEL - To issue a total of IDR3.0 tn in bonds and sukuk for debt repayment Dayamitra Telekomunikasi (MTEL) plans to issue bonds and sukuk worth IDR3.0 tn. The company issuers will conduct a Sustainable Public Offering (PUB) of Sustainable Bonds and Sukuk I Dayamitra Telekomunikasi with a target fund and remaining proceeds to be raised, each of a maximum of IDR2.5 tn and IDR500 bn, respectively. As an initial stage of the PUB, MTEL will issue and offer bonds with a principal amount of a maximum of IDR400 bn and Sustainable Sukuk Ijarah I Dayamitra Telekomunikasi Phase I 2024 with a target sukuk value of a maximum of IDR100 bn. In this first stage of issuance, Bonds and Sukuk Ijarah are issued with a tenor of 370 calendar days from the date of issuance. Mitratel appoints Bank Tabungan Negara as the trustee. Both Sustainable Bond and Sukuk Ijarah Phase I have received ratings from Pefindo respectively idAAA (Triple A) for bonds and idAAA(sy) (Triple A Syariah) for sukuk. Management revealed that all proceeds from the issuance of sustainable bonds and sustainable sukuk ijarah Phase I, after deducting underwriting fees, will be used to pay off loans. (Source : Bisnis Indonesia) Comment : We view MTEL is well-positioned to meet the needs of MNOs expanding their coverage outside Java, thanks to its extensive network of towers in the region, with ~60% located outside of Java, exceeding TOWR (~48%) and TBIG (~43%). As MNOs look to expand beyond Java, co-location becomes an attractive choice due to its cost-effectiveness and speed compared to B2S. This strong presence outside Java could place MTEL favorably against TOWR and TBIG. We project a moderation in the rate of increase for MTEL's CoR in FY24. The high rate of MNO co-location deployments (42% in 1Q24) is a contributing factor. This co-location sharing is likely to limit MTEL's CoR growth to just 6.8% yoy, compared to 11.6% in FY22 and 7.5% in FY23.