New Issue Review : Trikomsel SGD 3Y

Issuer:                           Trikomsel Pte. Ltd.
Guarantor:                    PT Trikomsel Oke Tbk
Structure:                      Fixed Rate Senior Unsecured Notes
Issuer/Guarantor/Issue rating: Unrated
Tenor:                         3 years tk
Issue Size:                    TBD
Initial Guidance:            Mid to high 5%
Change of Control:        Change of Control put at 101%
Financial covenants:      FCCR not less than 2.0x so long as Notes remain outstanding
Listing:                         SGX-ST
Clearing:                      CDP
Denoms:                      SGD250k
Governing Law:            English Law
Use of Proceeds:          Refinance a portion of existing borrowings

Risk factors

Liquidity Risk:    Liquidity may be low and unable to sell in secondary market.
Issuer Risk:     Clients will be fully exposed to the credit default risk of the issuer and may lose all the capital invested if issuer defaults.

Overview (From company netroadshow)
+ Leading mobile communications products distributor and retailer in the rapidly growing Indonesian mobile communications market with 30% market share within the Group’s addressable market

+ Largest network in Indonesia with 1,027 retail stores across 175 cities
+ #01  retailer and prominent distributor for leading international brand names such as Apple, Blackberry, HTC, Lenovo, Nokia, Samsung and Sony

+ 2012 revenue of USD992 mio & EBITDA of USD94mio
+ Listed on JKSE since 2009 with market cap circa USD872mio
+ Recently entered into a JV with global mobile communications products distributor, Brightstar Corporation


Not alot to say about this being their maiden bond issue for a shining star of a company whose stock price has risen 627% since their IPO in 2009, compared to the main JCI Index rise of just 186% for the same period.

No comparables around as most of the Indonesian names in the USD bond world are resource/commodity stocks, besides the state owned enterprises = SCARCITY VALUE. But I would not be surprised if this issue took off like wild fire given the success of most EM issues in the past week. And do note, there are almost no Asean telcos in the international bond space. Only risk would be more issues to come, which is not a bad thing especially if the coupon is lowered.

Debt leverage looks a tad high but prospects look fantastic with the american JV and much better than the indian names issuing.

It’s time for Indonesia to strike back !
Question, if you could bring yourself to buy Tata and gang, Raffles Education etc, then why not Trikomsel ? Singapore has a sizeable population of  NRIs’ too – Non Resident Indonesians !