Second bond issue continues to draw strong demand<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government struck gold again in its second bond issue for the
\nyear when it managed to sell on Tuesday Rp 3 trillion (some
\nUS$326 million) worth of local-currency bonds -- nearly twice the
\namount initially planned -- amid robust investor demand.<\/p>\n
The Ministry of Finance announced that the 12-year bond issue
\n-- the longest in term that the government has ever issued -- was
\n2.08 times oversubscribed and carried a weighted average yield of
\n10.42 percent.<\/p>\n
\"The government received Rp 6.24 trillion in total bids,
\nmostly from banks and pension fund managers,\" the ministry said.<\/p>\n
In its first bond issue for the year last month, the
\ngovernment received Rp 12.4 trillion in total bids for 10-year
\nbonds priced to yield at 10.12 percent. It sold Rp 5 trillion
\nworth of the bonds, more than twice the planned amount.<\/p>\n
Strong investor demand was also reflected in Tuesday's open
\nauction, as bidders eagerly requested yields for the bonds
\nranging from 10.20 percent to 12.00 percent. The highest yield
\ngranted, however, was 10.50 percent, while the lowest was 10.20
\npercent.<\/p>\n
Interest on the fixed-rate bonds is payable every January and
\nJuly. They mature on July 15, 2017 and have a coupon rate of 10
\npercent.<\/p>\n
The government plans to issue a total of Rp 43 trillion worth
\nof domestic bonds this year, including sovereign dollar-
\ndenominated bonds.<\/p>\n
The proceeds of the sales will in part go to help redeem
\nmaturing debts and help finance the state budget deficit, which
\nfor 2005 is estimated to reach about 1 percent of gross domestic
\nproduct (GDP).<\/p>\n
Last year, the government sold Rp 32.5 trillion worth of bonds
\nincluding $1 billion in global bonds last March -- all
\nenthusiastically grabbed up by investors.<\/p>\n
Many analysts predict that Indonesia will do well with its
\ngovernment bond issues this year, due to the country's improving
\neconomy as reflected in the recent upgrading of its debt ratings.<\/p>\n
Global rating agency Moody's recently upgraded its outlook for
\nIndonesia's current B2 long-term local currency rating -- which
\nis still five levels below the investment grade -- to \"positive\"
\nfrom \"stable\".<\/p>\n
Fitch Ratings also raised Indonesia's long-term foreign and
\nlocal currency ratings to BB- from B+, and affirmed its short-
\nterm rating at B, both with positive outlooks. Standard and
\nPoor's, meanwhile, upgraded Indonesia's long-term foreign
\ncurrency to B+ from a B and the local currency rating to BB from
\nB+, all with positive outlooks. The ratings remain two-levels
\nbelow their respective investment grade.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/second-bond-issue-continues-to-draw-strong-demand-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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