Fitch rates Tower Bersama bond AA(idn)

Fitch Ratings said it affirmed the long-term foreign- and local-currency issuer default ratings and senior unsecured rating of PT Tower Bersama Infrastructure Tbk. at BB-.

Fitch also said it affirmed the national long-term rating and national senior unsecured rating at AA-(idn).

The outlook is stable.

The agency also said it assigned a national long-term rating of AA-(idn) to Tower Bersama's Rp 7 trillion bond program and the bond of up to Rp 700 billion to be issued from the program.

The proceeds will be used to repay debt.

Fitch said it expects Tower Bersama's FFO adjusted net leverage to stay at about 6x in 2018 through 2020 as an aggressive shareholder return policy continues to weigh on free cash flow, which is already burdened by high finance costs and capital expenditures.

The company plans to operate at a leverage ratio of less than 5.5x, compared with its bond covenants of 6.25x, the agency added.

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