TBIG - Kicks off bonds offering

Tower Bersama Infrastructure (TBIG) has kicked off an offering of shelf-registered bonds phase VI, amounting IDR20 tn in funds. As part of its phase I of bond issuance, the company will raise IDR1.5tn, comprising of series A that yields 5.9% and 6.25% for series B. The proceeds will be earmarked for paying off maturing debts. TBIG has obtained a idAA+ for its debt rating from Fitch. (Source : Bisnis Indonesia) Comment : Amid headwinds from telco consolidation, it is worth noting that TBIG's strength lies on its ability to keep its finance costs in check, thanks to its lower leverage ratio compared to TOWR and strong cash flow. Although, lower leverage could come with a caveat: that it might indicate its conservative approach for expansion, especially into fiber. Given that and in addition to its demanding valuation, we still maintain our HOLD call for TBIG. On the other hand, continuous expansion especially from non-ISAT tenant is expected to prop up TBIG’s performance.