Indonesia debt roadshow to start on Wednesday<\/p>\n
NEW YORK (Dow Jones): Indonesia will kick off on July 8 in New
\nYork a roadshow to market a plan to exchange between $8 billion
\nand $10 billion in debt contracted by the country's financial
\ninstitutions into new loans, a source familiar with the offer
\nsaid Thursday.<\/p>\n
The exchange program is part of a broader agreement between
\nthe country and foreign creditor banks to tackle Indonesia's debt
\nburden.<\/p>\n
After New York, the roadshow will move on to Paris on July 9,
\nFrankfurt on July 10, Tokyo on July 13, Seoul on July 14 and
\nSingapore on July 15.<\/p>\n
Under the bank debt deal reached in Frankfurt in early June,
\ncreditors of Indonesian banks have the option of rolling over
\nexisting credits into new loans with maturities of one, two,
\nthree and four years with respective yields of 2.75 percent, 3
\npercent, 3.25 percent and 3.5 percent. The new loans will be
\nguaranteed by Indonesia's central bank.<\/p>\n
IMF Managing Director Michel Camdessus last week wrote to
\ninternational banks urging them to back the agreement to roll
\nover Indonesian private debt.<\/p>\n
During the roadshow, Indonesian officials and International
\nMonetary Fund representatives will also market a plan to rollover
\nexisting trade financing arrangements, the source said.<\/p>\n
That plan covers between $4.2 billion and $4.4 billion in
\ndebt. In June, foreign creditors banks agreed in principle to
\nmaintain trade financing at existing levels.<\/p>\n
Also to be discussed during the roadshow will be Indonesia's
\nplan to restructure more than $60 billion in corporate debt via a
\nnew agency dubbed INDRA.<\/p>\n
Under the INDRA plan, the Indonesian central bank will provide
\nforeign exchange risk protection to Indonesian corporations which
\nagree with their creditors to restructure their external debt for
\na period of eight years with a three-year grace period during
\nwhich no principal will be repaid.<\/p>\n
But sources cautioned that progress on that portion of the
\ndebt deal will be slow.<\/p>",
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"sponsor": "Okusi Associates",
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