Narrative
Full Description
Project narrative
On March 10, 2008, PT Indosat Tbk of Indonesia signed an agreement transferring the rights and obligations of a USD 27 million unsecured syndicated commercial loan to PT Bank CIMB Niaga Tbk and Bank of China (Jakarta Branch). This loan, initially part of a financing agreement signed on November 27, 2007, with HSBC Jakarta, is aimed at financing the development and launch of the Palapa-D telecommunications satellite and cover the premium associated with the medium-long term buyer credit insurance policy issued in connection with the Sinosure Term Facility. The loan carried the following terms: a 9-year maturity (final maturity date: November 28, 2016), and an interest rate of 6-month LIBOR plus a 1.45% margin per annum. The funds from this syndicated commercial loan were fully disbursed by PT Bank CIMB Niaga Tbk and Bank of China Limited, Jakarta Branch. Following the disbursement, PT Indosat Tbk commenced semi-annual payments as scheduled: on November 27, 2009, May 27, 2010, November 29, 2010, May 26, 2011, and November 28, 2011, PT Indosat Tbk paid the first, second, third, fourth, and fifth semi-annual installments, respectively, each amounting to US$1.4 million. On May 29, 2012, November 27, 2012, May 27, 2013, and November 27, 2013, PT Indosat Tbk paid the sixth, seventh, eighth, and ninth semi-annual installments, respectively, each amounting to US$2.0 million. The project involves the development and launch of the Palapa-D telecommunications satellite by Thales Alenia Space. The commercial contract was signed in June 2007 between PT Indosat Tbk and Thales Alenia Space. The satellite was launched on August 31, 2009, from China’s Xichang Satellite Launch Center by China Great Wall Industry Corp. Although initially placed in an incorrect orbit on the launch day, it was successfully repositioned to the correct orbit on September 9, 2009 (see source: “Palapa-D to be Salvaged After Being Launched into Wrong Orbit”). On August 31, 2020, the satellite was declared inadequate for operation due to fuel depletion, and its services were transferred to the Telkom-4 (Merah Putih) and BRIsat satellites (see source: "Palapa D").
Staff comments
1. The BOC loan had a variable interest rate of 6-month LIBOR + a 1.45% margin. The interest rate of the loan that supported this project is coded based on the 6-month LIBOR at the time of signing the loan agreement. The 6-month LIBOR rate on March 10, 2008, was 2.78125%. The interest rate was therefore coded as 2.78125% + 1.45%, or 4.23125%. 2. The individual contributions of PT Bank CIMB Niaga Tbk and Bank of China Limited to the syndicated loan are unknown. AidData assumes their contributions to be equal, with each entity contributing USD 13.5 million. 3. In addition to the syndicated commercial loan, the project was also financed through a COFACE Term Facility of USD 157.2 million and a Sinosure Term Facility of USD 44.2 million, making the total project cost USD 228.4 million. 4. The COFACE Term Facility is a 12-year term agreement with HSBC France for USD 157.2 million to cover 85% of the French content in the satellite contract and 100% of the COFACE premium. This loan bears a fixed interest rate of 5.69% per annum, payable semi-annually. 5. The Sinosure Term Facility is another 12-year term agreement with HSBC France for USD 44.2 million to finance 85% of the launch service contract. This loan bears interest at LIBOR + 0.35% per annum, payable semi-annually.