MBMA Offers 10.5% Coupon, Why Is Its Stock Price Falling?

PT Merdeka Battery Materials Tbk (MBMA) has again become the market's focus after offering new bonds worth around IDR 2.34 trillion.

One of the series is MBMA bonds offering fixed interest rates of up to 10.5% per annum, a figure that looks attractive to bond investors.

However, at almost the same time, MBMA stock price actually experienced a sharp correction.

On August 13, 2026 trading,MBMA shares fell 7.27% to IDR510and became one of the main pressures on the LQ45 index.

The decline occurred when the JCI fell 1.13% to 6,301.77 and hundreds of other stocks also ended in the red zone.

Key Takeaways

• MBMA issued Rp2.336 trillion in bonds in three series, with the highest coupon of 10.5% specifically for Series C.

• The decline in MBMA shares on August 13th coincided with broad pressure in the stock market, the bond issuance cannot be considered the sole cause.

• Net proceeds from the bonds were primarily used to accelerate debt repayment. MBMA's operational performance in the second quarter of 2026 showed production growth.

MBMA Offers IDR 2.34 Trillion in Bonds, What's the Coupon?

Source: Google Finance

MBMA offers Merdeka Battery Materials Shelf Registration Bond I Phase V Year 2026 with a principal of IDR 2.336 trillion.

This publication is divided into three series with different tenors and interest rates.

Series A is worth around Rp1.71 trillion with a fixed interest rate of 9% per annum and a tenor of 367 days.

Series B of around Rp529.97 billion offers 10% interest with a three-year tenor.

Series C worth around Rp95.34 billion offersMBMA bond coupon 10.5%with a five-note tenor year.

That is, the termMBMA 10,5%This does not mean that all Rp. 2.34 trillion bonds provide coupons.That's the amount. The 10.5% rate only applies to Series C, which has the longest tenor.

The public offering is scheduled to take place on August 24–26, 2026, while the bond listing on the Indonesia Stock Exchange is planned for September 2, 2026. The instrumentget a rankidAfrom Pefindo.

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Why is MBMA Stock Falling Despite Offering a High Coupon?

A high bond coupon doesn't automatically translate into a positive price boost for the stock. Bond investors and shareholders view the financing process differently.

Market Pressure is Widespread

On August 13, the JCI fell 1.13%, with 474 stocks declining. MBMA was one of the LQ45 stocks with the deepest correction, falling 7.27% to Rp510. ESSA, INCO, BRPT, DEWA, ​​and MDKA also experienced pressure.

The market at that time also faced sentiment stemming from changes in the MSCI index composition and pressure from foreign capital inflows. As of August 12, 2026, accumulated net foreign investor sales in the Indonesian stock market were reported to have reached Rp70.42 trillion.

Because of that, the reason MBMA shares fell is not accurate if only associated with bond announcements. 

This correction occurred amid market conditions that were already experiencing quite extensive selling pressure.

A 10.5% Coupon Also Means There's a Funding Fee

For bond buyers, high interest rates can increase the potential for coupon income.

For shareholders, the situation is more complex because the interest is a cost that the company must pay while the bonds are outstanding.

However, a high coupon rate doesn't automatically indicate a company's deteriorating condition. Investors need to consider the purpose for which the funds are being used, the debt structure after the transaction, the company's cash flow generation capacity, and its operational progress.

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What are MBMA Bond Funds Used For?

After deducting issuance costs, MBMA estimates it will earn around Rp2.325 trillion, equivalent to US$130.7 million.

The funds are planned to accelerate the repayment of part of the principal of Facility B of the term and revolving credit facility worth a maximum of US$250 million.

As of August 11, 2026, the balance of Facility B was recorded at US$150 million or approximately Rp2.67 trillion.

After payment using bond proceeds, MBMA estimates the remaining liability for the facility will decrease to approximately US$19.3 million.

This means that this publication is closer to the refinancing strategy or management liabilities compared to funding new expansion.

The positive impact may be an improvement in the debt maturity profile, but this action does not automatically generate additional revenue in the short term.

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What is the Prospect for MBMA Stock After the Correction?

Beyond market sentiment and financing structure,MBMA stock prospects will still be very determined by the performance of the nickel business and its downstream projects.

In the second quarter of 2026, saprolite ore production from Cahaya Mineral's Sulawesi mine increased 130% year-on-year to 2.9 million wet metric tonnes.

Limonite production also grew 87% to 4.7 million wet metric tonnes, while NPI production, including low-grade nickel matte, rose 16% to 19,505 tonnes of nickel.

MBMA also reported cash and cash equivalents of US$483 million as of June 30, 2026.

At the same time, HPAL projects continue to be developed, including the Sulawesi Nickel Cobalt facility which is targeting first MHP production in the second half of 2026.

These factors can be fundamental supportsMerdeka Battery Materials, butInvestors still need to pay attention to nickel prices, production costs, downstream project developments, funding burdens, and capital market conditions.

Interestingly, after falling 7.27% on August 13, MBMA rose again by 2.94% on August 14 trading when the JCI strengthened by 1.59%.

This movement again shows that overall market sentiment can have a significant impact on the daily movement of MBMA shares.

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So, Is the MBMA Decline Something to Worry About?

A one-day correction is not enough to determine the long-term direction.MBMA stock price.Investors need to assess whether the company is capable of increasing production, maintaining margins, completing downstream projects, and managing liabilities after the bond issuance.

Bonds with coupons of up to 10.5% do increase interest costs, but most of the funds will be used to reduce the balance of the credit facility that will soon mature.

Thus, this action should be seen as part of a funding structure management strategy, not simply additional debt.

For investors, the next period will be interesting because the market can assess MBMA from two sides at once: the company's ability to manage its financial obligations and how quickly operational growth can be translated into financial performance.

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FAQ

Do all MBMA bonds carry a 10.5% coupon?

No. The 10.5% coupon only applies to Series C bonds worth approximately Rp95.34 billion with a five-year term. Series A offers 9% interest, while Series B offers 10% per annum.

Why did MBMA stock drop on August 13, 2026?

MBMA fell 7.27% to Rp510, while the Jakarta Composite Index (JCI) also weakened 1.13%. The pressure was widespread across various stocks and coincided with the shift in sentiment in the MSCI index and significant foreign net selling.

Are MBMA bonds causing the stock price to fall?

There's insufficient evidence to conclude a direct causal relationship. The bond issuance and stock market decline occurred close together, but weakening market conditions were also a significant factor.

What are the prospects for MBMA shares?

The outlook will depend on nickel production growth, commodity prices, operating margins, the development of the HPAL project, and the company's ability to manage costs and debt. Second-quarter 2026 data shows increased production at several of MBMA's key operations.