TOWR - Mulls over debt paper issuance

TOWR - Mulls over debt paper issuance Sarana Menara Nusantara (TOWR) is mulling over options of refinancing, especially for debt paper as it aims to leverage outstanding credit worthiness rating of AAA for country rating and BBB from Fitch, implying an investment grade, to obtain more competitive rate. The company has so far employed diversification strategy for funding, including loan swap to reduce forex exposure risks, while reducing floating rate loans. (Source : Harian Ekonomi Neraca) Comment : As towerco is generally described as capital intensive business, an external source of financing is important to keep business staying afloat. Thus, it is imperative for TOWR to use more efficient funding source by leveraging triple A rating to keep its finance cost in check especially amidst high interest environment. Despite that, we view that high interest still weighs on TOWR's bottom line this year. Thus, we revise down our TOWR '23E bottom line on the grounds of CoF assumption readjustment. Retain our BUY call with slightly lower TP of IDR1,380, reflecting 11.4x EV/EBITDA.