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elecommunications company PT Indosat aims to reap Rp 2.5 trillion (US$202.3 million) from the issuance of conventional and Islamic bonds in the local bond market this month to refinance part of its debt and to obtain network licenses.

The company announced Monday evening on the Indonesia Stock Exchange (IDX) website that the company was offering conventional bonds worth Rp 2.31 trillion and Islamic bonds worth Rp 190 billion in different series.

The conventional bonds'€™ Series A (Rp 950 billion) has a coupon rate of 10 percent per year, Series B (Rp 750 billion) has 10.3 percent, Series C (Rp 250 billion) has 10.5 percent and Series D (Rp 360 billion) has 10.7 percent. The bond series will mature in three, five, seven and 10 years, respectively.

Meanwhile, the Islamic bonds'€™ Series A (Rp 64 billion) will mature in three years, Series B (Rp 16 billion) will mature in five years and Series C (Rp 110 billion) will mature in seven years.

The coupon payments for all the bond series will be made quarterly.

The bond offering period took place on Dec. 8-9. Indosat is scheduled to list the bonds on the Indonesian Stock Exchange (IDX) on Dec. 15 and it has appointed Mandiri Sekuritas, BCA Sekuritas, Danareksa Sekuritas, DBS Vickers Securities Indonesia, HSBC Securities Indonesia and Bank Rakyat Indonesia as underwriters for the bond sales.

Ratings agency PT Fitch Ratings Indonesia and PT Pemeringkat Efek Indonesia (Pefindo) have assigned triple A and triple A sharia ratings for the firm'€™s conventional and Islamic bonds, respectively.

'€œFrom the total raised fund from the bond issuance, 78 percent will be used to refinance part of our debts, while the remaining 22 percent will be used to obtain network license,'€ Indosat CEO Alexander Rusli said.

The network license would last for 10 years with payment being made annually, he said in a statement.

The license, which will be granted by the Communication and Information Ministry, will allow Indosat to use radio frequencies of 800 MHz, 900 Mhz and 1,800 Mhz.

From the 78 percent of the bond offering proceeds or up to Rp 1.95 trillion, Rp 1 trillion will be used to pay Rp 1.5 trillion-loans from PT Bank Central Asia (BCA), Rp 550 billion for Rp 700 billion-loans from PT Bank Negara Indonesia and Rp 250 billion for loans from Bank of Tokyo Mitsubishi UFJ.

As of September this year, Indosat has slashed its total debts to Rp 21.57 trillion from Rp 22.24 trillion.

Indosat suffered a net loss of Rp 1.32 trillion during the January-September period this year, compared with a total net loss of Rp 1.77 trillion incurred by the company during the same period last year.

Indosat saw a smaller loss this year largely because the company managed to reduce its foreign exchange (forex) losses to Rp 146.7 billion, a sharp decrease from Rp 2.3 trillion year-on-year (y-o-y).

In the country'€™s saturated telecommunications market, Indosat was not the only firm to suffer losses during the first nine months of this year.

Indosat'€™s shares, which are traded at the bourse under the code ISAT, remained unchanged at Rp 4,120 apiece on Tuesday'€™s close from the previous closing.