Indonesian DTH provider MNC Sky Vision is to issue 5-year fixed-rate senior secured bonds to refinance debt and fund its US$95m acquisition of S-band transponders from SES.
HSBC and Standard Chartered Bank have been mandated as joint bookrunners and…
Indonesian DTH provider MNC Sky Vision is to issue 5-year fixed-rate senior secured bonds to refinance debt and fund its US$95m acquisition of S-band transponders from SES.
HSBC and Standard Chartered Bank have been mandated as joint bookrunners and joint lead managers for the dollar-denominated issue, which will be non-callable for three years.
Investor meetings commenced on October 29, covering the US, Hong Kong, Singapore and London.
Sky Vision was unable to comment, but analysts at Moody’s said the proposed bonds will have a debt incurrence covenant of 2.75x before the end of December 31, 2011, and more than 3x after this date.
“Moody’s estimates Sky Vision to have good headroom against this covenant over the next 12 months,” the analysts stated in a credit opinion note.
The DTH provider broadcasts from a single SES-owned satellite called Indosat II at 108.2E, where it has ten active S-band transponders and two back-ups. Also known as SES-7, the Boeing-manufactured bird was launched in 2009 with the option for Sky Vision to acquire all S-band transponders at a later date.
As well as expanding its S-band capacity, the proceeds will go towards refinancing a term loan with Lehman Brothers, wiping any material debt maturities over the next 12 months.
Headquartered in Jakarta, Sky Vision is 75% owned by Indonesian media company Mediacom, which is 51% owned by local holding giant Bhakti Investama.
Assigning a B2 rating to Sky Vision and a provisional B2 rating for its proposed notes offering, Renee Lam, a Moody’s VP and senior analyst, said: “Sky Vision leads the Indonesian pay-TV at this point in time, but we believe the potential exists for an escalation in competition over the medium-to-long term.
“Furthermore the rating reflects a lack of clarity in regard to its vital operational assets, which reside at a non-owned entity, and the use of mandatory exchangeable bonds to maintain control, but avoid consolidation of this entity.”
For the year ended December 31, 2009, Sky Vision posted a consolidated net revenue of US$102.3m, representing a debt-EBITDA ratio of 2.8x. For the corresponding period in 2008, the group recorded consolidated net revenue of US$83.1m, resulting in a debt/EBITDA ratio of 4.2x.
