S&P rates new Excelcomindo notes B+

Standard & Poor's said it assigned its B+ rating to Indonesia's PT Excelcomindo Pratama's proposed offering of up to $300 million of senior unsecured notes.

The notes will be issued by Excelcomindo's wholly owned subsidiary, Excelcomindo Finance Co. BV and will be unconditionally and irrevocably guaranteed by Excelcomindo. The rating on the notes, therefore, reflects the corporate credit rating on Excelcomindo.

Proceeds from the notes will be used for refinancing Excelcomindo's debt.

S&P said Excelcomindo is the third-largest cellular telecommunication operator in Indonesia, with a market share of about 16% and a subscriber base of 2.7 million at Sept. 30. In the nine months to September 2003, Excelcomindo's total revenues were Indonesian rupiah 1.9 trillion and its EBITDA Rp1.1 trillion.

Excelcomindo's subscriber base has grown by a healthy 50% in the past three years. With a population of 220 million and cellular market penetration of only 7%, Indonesia has good prospects for growth in the wireless business, the agency added.

"Excelcomindo stands to benefit from its position as an existing major player with a nationwide transmission network in a growing market," said S&P credit analyst Sharad Jain, director in the Corporate and Infrastructure Ratings Group. He added: "Nevertheless, all cellular operators in Indonesia, including Excelcomindo, face increasing competition in pricing, particularly from the impending threat of fixed-wireless services, which provide similar functions as wireless technology, but at lower cost."

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