PT Tower Bersama Infrastructure (TBIG) is seeking a mezzanine debt facility of $50 million even as it has received more funds than it needs for a separate $325 million loan, according to Singapore-based Gavin Caudle, an adviser to the board of directors and a founder of the company.
The Jakarta-based provider of telecommunications infrastructure to wireless carriers is seeking a 3 1/2-year mezzanine loan instead of more senior level debt because the senior facility is borrowed under a program which limits borrowings to no more than 4.5 times earnings before interest, tax, depreciation and amortization, Caudle said. Eleven banks have pledged to commit funds to the $325 million senior level loan, he said.
Australia & New Zealand Banking Group Ltd. (ANZ), Bank of Tokyo- Mitsubishi UFJ Ltd., DBS Bank Ltd., Oversea-Chinese Banking Corp. and United Overseas Banking Ltd. were hired by Tower Bersama to help arrange the senior debt facility more than two months ago, Caudle said. Proceeds from that facility will be used to help partially fund Tower Bersama’s purchase of 2,500 mobile phone towers from PT Indosat and for other capital expenditure requirements.
The five banks underwrote $250 million of the senior debt facility and were subsequently joined in senior syndication by PT Bank Central Asia, PT Bank Negara Indonesia, CIMB Group Holdings Bhd. (CIMB), Credit Agricole CIB, HSBC Holdings Plc and Qatar National Bank SAQ (QNBK), which pledged a combined $360 million. That brought the total raised to $610 million before the loan began to be marketed in general syndication to an even wider group of lenders earlier this month, Caudle said.
“We’re going ahead with general syndication because we want more banks to become familiar with us,” Caudle said. “We’re growing fast, we need capital and we’ll be coming to the loan market every year as long as it can support us.”
Tower Bersama’s current borrowings under its debt program are equal to three times EBITDA. The mezzanine debt is being borrowed by a holding company which isn’t covered by the debt program.
The $325 million facility pays a margin of 400 basis points and 425 basis points over the London interbank offered rate to offshore and onshore lenders respectively. The margin drops to 275 basis points after six months, Caudle said.