CGIF guarantees first rupiah public bond offering
Dual-tranche bonds enable issuer to diversify funding sources
12 Jan 2021 | Chito Santiago

Indonesia’s submarine and inland network infrastructure provider PT Ketrosden Triasmitra on January 8 accessed the debt capital market for the first time – thanks to the guarantee extended to its bond offering by Credit Guarantee and Investment Facility (CGIF), a trust fund established by the Asian Development Bank (ADB).

The company raised 583 billion rupiah (US$41.40 million) of fixed rate senior unsecured bonds for three years and five years, which are listed on the Indonesia Stock Exchange on January 11. The transaction marks the first CGIF-guaranteed rupiah bonds offered through a public offering in Indonesia, setting the benchmark for future Indonesian companies looking to tap the country’s public bond market with a CGIF guarantee.

Triasmitra’s first foray into the debt capital market successfully introduced the company’s credit into a broader investor group and further diversifies its funding sources. With CGIF’s guarantee and an issue rating of idAAA(cg) from Indonesian rating agency Pefindo, Triasmitra finance director Vidcy Octory says the company was able to achieve a compelling price level, which was not disclosed.

Commenting on the deal, CGIF chief executive officer Guiying Sun expresses support to Triasmitra with its capital expenditures in the telecommunication infrastructure sector, which is crucial in the pandemic situation. “This transaction is also in line with our developmental mission to introduce first-time bond issuers in the Indonesian bond market,” she says.

The bonds are 100% guaranteed by CGIF and the proceeds will be used for loan repayment, investment in capital goods and maintenance business. Eban Banowo, associate director for investment banking at Indo Premier Sekuritas, which acted as the sole lead underwriter for the transaction, cites the challenges in introducing a new issuer into the Indonesia bond market amid the pandemic, but these were overcome on the back of Triasmitra’s strong track record in the telco infrastructure sector and CGIF’s strong credit profile, which attracted the participation of quality investors. “This transaction is clearly a benchmark for other Indonesian issuers looking to access the rupiah bond market with a CGIF guarantee,” he adds.

Triasmitra is engaged in fibre optic cable system development, deployment, sales and maintenance. With 26 years of experience in the telecommunications sector, the company and its subsidiaries have successfully developed landmark submarine fibre optic cable systems in Indonesia such as the Jakarta-Singapore (B2JS), Jakarta-Surabaya (Jayabaya) and Medan-Dumai (Damai) cable systems.

CGIF is a multilateral facility established by the Asean members, China, Japan, Korea (Asean+3) and the ADB. Established to develop and strengthen the local currency and regional bond markets in the Asean+3 region, it commenced its guarantee operations on May 1 2012 and seeks to provide credit enhancements, mainly in local currencies, issued by credit-worthy Asean+3-domiciled bond issuers.