Starhub Limited (“Starhub”) plans to issue new 10 years senior unsubordinated unsecured bonds at the initial price guidance (“IPG”) of 2.80%. The new bonds are expected to be issued on 26 November 2025 and mature on 26 November 2035. Both the issuer and bonds are expected to be unrated. The net proceeds from the issuance will be used for general corporate and working capital purposes, investments, and refinancing of existing borrowing.
Starhub is one of Singapore’s leading telecommunications companies, that connects consumers and enterprises in Singapore through mobile, internet, TV, and enterprise technology services, including managed services, enterprise connectivity, and carrier and voice.
In the third quarter of 2025 (“3Q2025”), Starhub recorded revenue of S$550.3 million . This represents a year-on-year (YoY) decline of 4.3 %, on the back of softer broadband performance from the consumer side, with average revenue per user (ARPU) and number of subscriptions slipping for the broadband segment compared to the prior quarter. Alongside a weaker enterprise performance, this caused net profit after tax (NPAT), excluding non-recurring items, to slump 29.5% YoY to S$26.2 million.
Starhub’s consumer segment remains its bread-and-butter, though revenue softened 7.5% YoY to S$239.2 (62.1% of total revenue) million in 3Q2025. Lower ARPU of S$34 for its broadband segment and fewer account subscriptions of 568,000 was partially offset by stronger performance for its mobile segment which saw ARPU increase to S$22, and subscriptions rising to 2.19 billion . Intense price competition faced for both segments are buffered by Starhub’s new value propositions.
Starhub’s regional enterprise segment experienced weaker revenue momentum in 3Q2025, declining 7.8% YoY compared to the previous year’s quarter to S$145.7 million in turnover . However, we remain optimistic about Starhub’s push to grow its Cybersecurity, AI, and Cloud segments (under Enterprise). For the first nine months of 2025 (“9M2025”), the segment grew 1.5% YoY, with regional enterprise and managed services contributing YoY growth of 1.5% and 3.2% , respectively. Order book for these two segments also saw positive momentum YoY, growing 5.7% and more than 15.0% respectively.
The telco reported a net debt to trailing twelve months (TTM) earnings before interest, tax, depreciation, and amortisation (EBITDA) of 1.41 x. Do note that this metric excludes a one-time lump sum spectrum payment. Interest coverage ratio is also healthy at 10.1x . Starhub’s net debt to TTM EBITDA is higher, while its interest coverage ratio is lower as compared to Starhub’s main competitor of Singtel. Net debt to TTM EBITDA increased from the previous year’s figure of 1.25x owing to an increase in net debt taken by Starhub to fund its ongoing capital expenditures and investments, and lower EBITDA due to softer mobile performance.
Nevertheless, we remain positive due to the relatively low net debt to TTM EBITDA figure and by the progress of the telco’s cost savings initiative (implemented in 2022), with Starhub identifying an additional S$60 million in cost savings for FY2026 – FY2028 . As of 30 June 2025 (“1H2025”), the company reported total borrowings of S$1.3 billion with S$546.9 million (S$246.9 million in bank loans and S$300 million in medium term notes) coming due in one year or less. We believe that this is manageable if Starhub maintains its positive free cash flow (S$123.6 million (excluding one-off spectrum payment) in 3Q2025 ), aided by a cash balance of S$487 million.
Recommendations
Table 1: Peer comparison
|
Issuance |
Issuer |
Ask Price |
Years to Maturity |
Yield to Maturity |
|
STHSP New Issue 26Nov2035 |
Starhub Ltd |
100.00* |
10.00 |
2.80% |
|
Starhub Ltd |
101.68 |
5.14 |
2.13% |
|
|
Singtel Optus Finance Ltd |
101.50 |
9.69 |
2.55% |
|
|
Singtel Optus Finance Ltd |
105.20 |
6.35 |
2.24% |
|
|
Netlink Treasury Pte. Ltd. |
101.54 |
9.80 |
2.47% |
Source: Bondsupermart, iFAST Compilations.
Data as of 17 November 2025
*Yet to be issued
Overall, we think Starhub’s credit profile is relatively stable with a manageable debt profile and interest coverage. At an IPG of 2.80%, Starhub’s new senior unsecured issuance is fairly priced when compared to closest peers’ similar tenor bonds from Netlink (NETREA 2.65% 03Sep2035 Corp) and Singtel Optus (SGTOPT 2.726% 25Jul2035 Corp) which are mostly trading at a yield-to-maturity of around mid-2% (Table 1). We expect the final price guidance (“FPG”) to adjust downwards from the IPG.
Do note that Singtel Optus is a wholly owned key subsidiary of Singtel, and we expect the parent company (Singtel) to provide some degree of support for debt repayments of Singtel Optus. Although the bonds are by the subsidiary of Singtel, Optus Finance, we compared the credit ratios of Starhub and Singtel in earlier paragraphs. In sum, we believe Starhub’s new 10-year senior issuance is suitable for investors who are seeking a stable name with a solid market presence.
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities.
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