XL Axiata, Indonesia's second-largest mobile phone operator is planning to raise Rp 2.18 trillion ($163 million) from selling Islamic bonds this month to refinance its debt and fund its working capital.(Antara Photo/Dhoni Setiawan)

XL Axiata to Offer Rp 2.18t Islamic Bonds

BY :SARAH YUNIARNI

APRIL 09, 2017

Jakarta. XL Axiata, Indonesia's second-largest mobile phone operator is planning to raise Rp 2.18 trillion ($163 million) from selling Islamic bonds this month to refinance its debt and fund its working capital.

The company's Islamic bond sale is the second tranche of the planned Rp 5 trillion issuance. In 2015, XL issued Rp 1.5 trillion.

The company will offer the bonds, known as sukuk ijarah, in five series, each with a different maturity period.

The first series Rp 1.04 trillion bonds are set to mature in 370 days. In the second series, Rp 402 billion bonds will have a three-year maturity period.

In the third series, XL will offer Rp 142 billion with a five-year maturity period. In the fourth, Rp 260 billion to mature in seven years. The last series, of Rp 336 billion, will mature in 10 years.

The mobile operator appointed CIMB Securities Indonesia, Mandiri Sekuritas, Maybank Kim Eng Securities, DBS Vickers Securities Indonesia and Indo Premier Securities as underwriters.

Fitch Ratings Indonesia, a local unit of global rating assessor Fitch Ratings, has granted an AAA rating for the issuance, reflecting the lowest risk compared to the company's domestic peers.

The proceeds will be used to pay back the debt of Rp 375 billion to Bank Mandiri and Rp 1.8 trillion to Bank Central Asia, while remaining Rp 5 billion will be allocated to pay the lease of XL's telecommunication tower.

The company will offer the bonds from April 21 to 25, before a listing on the Indonesia Stock Exchange on May 2.

XL booked Rp 376 billion in net income last year, a huge swing from Rp 25 billion losses a year earlier, thanks to the sales of cellular towers and favorable foreign-exchange conditions.

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