Govt may issue bonds later this month<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government plans to issue more bonds later this month or
\nearly next month to refinance maturing bonds.<\/p>\n
\"We'll announce the exact timing -- whether to issue the bonds
\nthis month or next. We'll keep a watchful eye on the market,\"
\nBoediono said on Friday.<\/p>\n
Boediono did not specify the value of the bonds, but the
\ngovernment still has around Rp 5 trillion-worth of bonds to be
\nissued this year.<\/p>\n
In total, the government has planned to issue Rp 11.7
\ntrillion-worth of bonds this year to help refinance some of the
\nRp 55 trillion-worth of government recap bonds maturing this
\nyear.<\/p>\n
Thus far, the government has issued Rp 6.7 trillion of the Rp
\n11.7 trillion in bonds.<\/p>\n
Boediono said the remaining Rp 5.7 trillion-worth of bonds
\nwould be issued in two stages, with the first slated for later
\nthis month or early next year.<\/p>\n
The government has said the scheme is highly important to help
\nease the payment burden of its huge domestic debts, as well as to
\nmaintain investor confidence and promote the local bond market.<\/p>\n
The state budget has been heavily burdened by the payment of
\nrecap bonds totaling Rp 430 trillion that were issued in the late
\n1990s to bail out troubled banks.<\/p>\n
The next bond issue will be overshadowed by the disappointing
\nresults of the last bond issue in September, in which the
\ngovernment had to scale down the value of the issue, mostly due
\nto insufficient demand.<\/p>\n
The government was able to sell only Rp 3.99 trillion-worth of
\nbonds as against the target of Rp 5 trillion. This, analysts
\nsuspected, was because of the long-dated maturity profile of the
\nbonds.<\/p>\n
The bonds, carrying a weighted average yield of 11.6 percent,
\nare due to mature in December 2012.<\/p>\n
The result of the September issue was in stark contrast to the
\nfirst issue of the year in April. That time, the government's Rp
\n2.7 trillion-worth of bonds were 2.8 times oversubscribed.<\/p>\n
Analysts have said that investors might view the long-term
\nbonds as less attractive because they carry higher risks than
\nthose of the short-term ones.<\/p>\n
They said the government needs to strike a balance between
\ninvestors' preference and the need to ease the burden on the
\nstate budget.<\/p>\n
Nevertheless, Boediono said the government was still upbeat
\nthat the next bond issue would be successful, given \"the market's
\nhigh level of liquidity.\"<\/p>\n
He did not elaborate.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/govt-may-issue-bonds-later-this-month-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }