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March 17 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has affirmed the Issuer Default Rating Long-Term Rating (IDR) of PT Tower Bersama Infrastructure Tbk (TBI) at ‘BB’. At the same time, Fitch has affirmed the National Long-Term rating at ‘AA-(idn)'. Outlook is stable. A complete list of the rating actions can be found in section This akhirpublikasi.
Fitch mengafirmasi level although FFO-adjusted net leverage Tower Co remain above 4.0x, the mold in which the action of the negative fractions can considered. FFO adjusted net leverage was 5.4x Mutual Tower at the end of December 2013, due to high debt to fund the development of a tower in the year 2013. However, Fitch estimates that leverage will fall below mold negative staging action in the medium term due to the increase in current cash from long-term contracts with EBITDA margins above 80%. the risk of high leverage also be balanced with a strong customer portfolio with a higher proportion of operators who have the investment-grade.
National ranking in the category of ‘AA’ indicates the expectation would risk failure very low pay relative to other issuers or securities in Indonesia. Credit risk is only slightly different from issuers or debt securities that are rated the highest in Indonesia.
Factors Fueling Rating
Maintain Growth The High Leverage: Leverage of Tower Bersama in 2013 remains high due to the high debt to finance the construction of new minarets for some operators, especially PT Telekomunikasi Cellular (Telkomsel, BBB / Stable). Construction of the new tower of Tower Bersama reach peak in 2013 with the construction of a new tower 1,800 (2012: 1,144). Fitch estimates that leverage will remain above the reference action negative ranking of 4.0x in 2014 and 2015. However, Fitch expects that it would not be sustainable and FFO-adjusted net leverage will fall below 4.0x in 2016.
Decline Slows Acquisition Leverage: As a provider of telecommunication towers second largest in Indonesia measured from the number of towers, Tower Bersama has limited options to acquire a portfolio of smaller towers another provider of telecommunication towers. However, the acquisition of the tower Significant could happen if such operator PT Telekomunikasi Indonesia Tbk (BBB-/Stabil), PT Indosat Tbk (BBB / Stable) and PT XL Axiata Tbk (XL, BBB / Stable) decided to sell their tower portfolio. Fitch estimates that acquisition will further slow the decline in leverage from Fitch estimates now and provide negative pressure on the ratings.
Its Improved composition Renters: renters portfolio composition of Tower Bersama improved the revenue contribution from telecom operators are rated investment-grade rose to 75% in 2013 from 70% in 2012. Improved quality tenants offset the high leverage of the company. The company has the same rank with the provider of telecommunication towers in Indonesia, PT Professional Telekomunikasi Indonesia (Protelindo, BB / Stable), which has a FFO-adjusted net leverage below 4.0x but obtain less than 50% of its revenue from telecom operators rated investment-grade.
Although Tower Bersama continue to face the risk of the operator ekposurnya CDMA is experiencing many difficulties, Fitch estimates that the composition tenants will tend to improve with more contributions from operators rated investment-grade because they will continue to make investments to expanding the network. Fitch also estimates that the contribution of the operator rated investment-grade telecommunications will rise more than 75% after XL completed the acquisition of PT Axis Telekom Indonesia in March , 2014.
Solid Margin: Tower Bersama rating is supported by profitability solid and income supported by long-term contracts are not can be canceled. Tower Bersama recorded EBITDA margin of 81.9% in 2013, rose from 81.5% in 2012. The cash flows of the company also has a level high predictability of the revenue that has been recorded by USD1.9 billion at the end of September 2013, with an average of 7.3 during the contract period years.
Access to Funding Strong: Liquidity is also supported from Tower Bersama by strong access to bank loans with USD262 million capital facilities work that has not been used. The company also has a track record in the market bonds with the issuance of local currency bonds and currency bonds foreign. The company plans to replace the guaranteed debt at the level of operating company with debt that is not guaranteed at the company level holding. In addition, the company also plans to minimize exposure against foreign currencies has debt in local currency.
Can be Managed Currency Exposure: Tower Bersama has approximately USD887 million debt in foreign currency, approximately 81% of the total debt. more than 90% of corporate debt is protected by a combination of hedging and hedging contracts natural annual revenue of $ 40 million (18% of total revenue). The Company recorded a IDR854 billion (USD75 million) in cash (which includes cash limited) at the end of December 2013 in which USD56 million is saved in U.S. dollars.
Fitch does not expect the ratings of positive action will occur in the medium term because of the company’s leverage will remain high.
Negative: future developments that may, individually or collective downgrade include:
- Acquisition of the tower portfolio funded by debt or default of weaker telecom operators resulting FFO-adjusted net leverage is above 4.0x on an ongoing basis
- The fall in revenues from telecom operators rated investment-grade below 50%
- Genesis which led Fitch to revise perkiraanya so Fitch no longer estimate FCF of the company will be positive in 2015.
A complete list of the rating actions:
Rating Long-Term Foreign Currency USD affirmed at ‘BB’; Outlook Stable
Rating Long-Term Local Currency USD affirmed at ‘BB’; Outlook Stable
Long-Term National Rating affirmed at ‘AA-(idn); Outlook Stable
Senior Rating Foreign Currency Not Guaranteed at ‘BB’
USD300 million senior unsecured bonds issued by TBG Global Pte Ltd. is affirmed at ‘BB’
Senior National Rating Not Guaranteed affirmed at ‘AA-(idn)’
IDR4 trillion continuous bond program affirmed at ‘AA-(idn)’
IDR740 billion bonds issued in the first phase under the bond program sustained above affirmed at ‘AA-(idn)'