Business Context and Reporting Period
This Form 6-K filing by Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (Telkom) covers the month of September 2018, with a specific reporting date of September 5, 2018. Telkom is Indonesia's largest telecommunications and network provider, offering fixed wireline, cellular, internet, and multimedia services under its TIMES portfolio. The filing serves as an announcement to the Indonesian Financial Services Authority (OJK) regarding a significant debt issuance.
Key Financial Metrics and Debt Issuance
The filing details the issuance of two distinct debt instruments on September 4, 2018, totaling approximately Rp1.5 trillion in principal value. The filing does not provide revenue, profit, cash flow, or margin data for the period.
| Instrument | Total Principal/Value (IDR) | Rating | Use of Proceeds |
|---|---|---|---|
| Telkom Medium Term Notes I Year 2018 | Rp758,000,000,000 | idAAA (Pefindo) | Network development (FTTH) |
| Telkom Medium Term Notes Sharia Ijarah I Year 2018 | Rp742,000,000,000 | idAAA (sy) (Pefindo) | Network development (FTTH) |
Medium Term Notes (MTN) Structure:
- Series A: Rp262 billion; 7.25% fixed interest; 370-day term.
- Series B: Rp200 billion; 8.00% fixed interest; 2-year term.
- Series C: Rp296 billion; 8.35% fixed interest; 3-year term.
Sharia Ijarah Structure:
- Series A: Rp264 billion; ~7.25% annual return; 370-day term.
- Series B: Rp296 billion; 8.00% annual return; 2-year term.
- Series C: Rp182 billion; 8.35% annual return; 3-year term.
Material Changes
The primary material change is the increase in debt obligations resulting from the issuance of the MTN and Sharia Ijarah notes. The filing does not provide comparative financial data against prior periods to quantify changes in liquidity or leverage ratios.
Outlook, Risks, and Management Commentary
Management states that the proceeds from these issuances will be utilized for the development of access and backbone networks, specifically focusing on Fiber To The Home (FTTH) broadband expansion. The company expects this financing to support the fulfillment of its strategic targets. The notes have been assigned the highest credit ratings (idAAA and idAAA (sy)) by PT Pemeringkat Efek Indonesia (Pefindo), valid until August 1, 2019. PT Bank Tabungan Negara (Persero) Tbk serves as the monitoring agency.
Investor Verification Checklist
- Verify the total outstanding debt load of Telkom post-issuance to assess leverage impact.
- Confirm the specific allocation of funds to FTTH projects versus general corporate purposes.
- Review the interest rate environment in Indonesia to evaluate the cost of capital relative to market rates at the time of issuance.
- Check the company's upcoming cash flow requirements to ensure coverage of the quarterly interest/return payments starting December 4, 2018.
- Monitor the validity period of the idAAA credit rating and any potential downgrades.