Govt to soon name global bond's lead underwriters<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government is pressing ahead with its sovereign bonds
\nissue plans, saying it had received proposals from 14 investment
\nbanks to underwrite the issue and would name the lead
\nunderwriters in less than two weeks.<\/p>\n
\"We'll decide on the lead underwriters by Jan. 20,\"
\nHerwidayatmo, a member of a government team assigned to prepare
\nthe issue, was quoted as saying by Dow Jones on Friday.<\/p>\n
None of the 14 were mentioned, but the news agency cited
\nCiticorp, HSBC, Deutsche Securities, J.P. Morgan, ING, Morgan
\nStanley and UBS as likely candidates.<\/p>\n
The government is planning to issue bonds worth some US$500
\nmillion on the international market this year as an alternative
\nsource of funding to help finance the 2004 state budget deficit,
\nestimated to be 1.2 percent of the country's gross domestic
\nproduct (GDP) this year.<\/p>\n
The state budget initially set the figure at $400 million, but
\nthe government has increased the size due to higher demand than
\nearlier expected for the bonds. The decision was made after the
\ngovernment claimed it had received positive responses from
\ninternational investors during two overseas roadshows last year.
\nIt is the first bond issue by the government since the 1997
\nfinancial crisis.<\/p>\n
There is now speculation that the government might increase
\nthe size of the issue to up to $1 billion due to the strong
\ndemand.<\/p>\n
Investors' interest in Indonesia has been on the rise lately
\ngiven the country's slowly-but-steadily improving economy,
\nnotably its newfound stability in several key macroeconomic
\nindicators.<\/p>\n
A rupiah that has stabilized relative to the weak dollar,
\nbenign inflation and declining trend in the central bank's
\nbenchmark interest rate have managed to improve the country's
\nsovereign ratings.<\/p>\n
Late last year, international rating agency Fitch Ratings
\nupgraded the country's sovereign rating with a stable outlook,
\nciting improving economic stability. It was followed by similar
\nmoves by Moody's and Standard and Poor's (S&P) Rating Service.<\/p>\n
Although the country's rating remains below investment grade,
\nthe move should be seen as a vote of confidence in the economy.<\/p>\n
The government is making strenuous efforts to seek as many
\nsources of funds to chip away at its massive deficit this year as
\nthe government ended the International Monetary Fund (IMF)
\nprogram in December.<\/p>\n
Exiting the program makes the country ineligible for the debt
\nrescheduling facility from the Paris Club of creditor nations and
\nthe London Club of private creditors, meaning that the government
\nmust now fully repay any maturing sovereign debts.<\/p>\n
Additional pressure on the state budget will also come from a
\nmaturing government domestic debt, estimated at Rp 24.7 trillion
\nfor this year alone.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-soon-name-global-bonds-lead-underwriters-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}