Govt issues Rp 3.75t bonds amid strong interest<\/p>\n
Dadan Wijaksana, The Jakarta Post, Jakarta<\/p>\n
The government sold Rp 3.75 trillion (US$405 million) worth of
\n10-year bonds on Tuesday, which was much greater than initially
\nplanned due to strong demand from investors.<\/p>\n
The rupiah-denominated bonds were issued at a weighted average
\nyield of 11.21 percent, lower than the 11.74 percent yield set
\nfor 10-year bonds issued in August -- in what a top government
\nofficial said was another sign of investor confidence in the
\neconomy.<\/p>\n
\"Having been oversubscribed, and with a relatively competitive
\nyield, it reflects confidence from the market,\" Anggito Abimanyu,
\nthe Ministry of Finance's head of Economic Analysis, Finance and
\nInternational Cooperation (Bapekki) told reporters.<\/p>\n
\"It (confidence) was perhaps supported by the smooth
\nelection,\" he added, referring to last week's presidential run-
\noff in which incumbent President Megawati Soekarnoputri was
\nsoundly beaten by her challenger Susilo Bambang Yudhoyono,
\nalthough the government will not officially announce it until
\nOct. 5.<\/p>\n
Pension funds, insurers, securities and investment firms were
\namong the bidders, Anggito said.<\/p>\n
The government initially planned to issue Rp 2.5 trillion in
\nbonds, but as it drew bids up to Rp 7.1 trillion (almost three
\ntimes oversubscribed) on Tuesday's bond auction, the Ministry of
\nFinance increased the size of the issue.<\/p>\n
\"There is a lot of money floating out there in the market,\"
\ndriving demand for the bonds, said Dastin Mudijana, who helps
\nmanage $1.2 billion in fixed-income assets at PT Panin Sekuritas
\nas quoted by Bloomberg. \"Pension fund and insurance companies are
\nbidding.\"<\/p>\n
It was the second time the government issued a 10-year bond,
\nlonger than the usual seven or eight-year bonds.<\/p>\n
Tuesday's issue brings the total domestic bonds issue this
\nyear to Rp 17.7 trillion.<\/p>\n
The government has targeted to issue around Rp 23 trillion
\nworth of rupiah-denominated bonds this year to help finance the
\n2004 state budget deficit.<\/p>\n
For this year, the deficit has been estimated at Rp 26.3
\ntrillion, or about 1.3 percent of gross domestic product.<\/p>\n
According to Anggito, the government would likely divide the
\nremaining bonds issues into two auctions, in October and
\nNovember.<\/p>\n
\"It's a possibility as we want everything done by December.
\nBut, we'll look into it more closely, it will depend on the
\nmarket as well. So, nothing has been decided yet,\" Anggito said.<\/p>\n
The next bond issue is scheduled for Oct. 26, he said, but did
\nnot disclose the size of the issue.<\/p>\n
Tuesday issue carried a coupon of 11 percent and will mature
\non Oct. 15, 2014, while the interest would be payable twice a
\nyear on April 15 and Oct. 15, respectively, a statement said.<\/p>\n
Moody's Investors Service rates Indonesia's local currency
\ndebt B2, while Standard & Poor's assigns a ranking of B+, data
\nfrom Bloomberg showed.<\/p>",
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