Government launches first 2005 bond issue

Government launches first 2005 bond issue

The Jakarta Post, Jakarta

The government launched its first bond issue for the year,
selling on Tuesday Rp 5 trillion (US$545 million) of a 10-year
bond, more than twice the amount initially planned due to a
strong response from investors.

Mulia Nasution, director general of Treasury at the ministry
of finance, told reporters that the bonds, which were priced to
yield 10.12 percent, had received bids worth Rp 12.4 trillion.

"The interest to buy the government's bonds was good so that
we could increase the size of the bonds from the initial target,"
he said.

The bonds will mature on June 15, 2015.

Bloomberg data says that Moody's has a rating of B2, five
levels below investment grade, for Indonesia long-term local
currency debt, while Standard & Poor's rates the rupiah debt BB,
two levels below investment grade.

Tuesday's issue was the first of the total Rp 43 trillion in
bonds planned to be sold throughout the year, including sovereign
dollar-dominated bonds.

The proceeds of the sales would in part go to help redeem
maturing debts and help finance the state budget deficit, which
for 2005 is estimated to reach about 1 percent of the gross
domestic products (GDP).

Last year, the government sold Rp 32.5 trillion in bonds,
including $1 billion of global bond last March.

Mulia did not say when the next issue would take place.