Government sells Rp 3.85t of treasury bonds

Government sells Rp 3.85t of treasury bonds

The Indonesian government sold Rp 3.85 trillion (US$400.9 million) of 11-year and 15-year Treasury bonds to help fund its budget deficit, the Ministry of Finance said.

The 11-year securities that mature on May 15, 2016, were priced to yield 11.25 percent. The sale adds to the bonds first sold on May 17 with a 10.75 percent coupon, Mulia Nasution, the finance ministry's director general of treasury, told reporters on Tuesday. The ministry planned to sell Rp 2.5 trillion of securities.

The government also sold 15-year debt maturing Nov. 15, 2020, priced to yield 11.59 percent.

The 10.75 percent Treasury bond maturing in 2016 was bid to yield 11.148 percent, according to prices from HSBC Treasury & Capital Markets as of 2:30 p.m. in Jakarta.

Indonesia may sell Rp 47.1 trillion of bonds this year from an original target of Rp 43 trillion as the country may spend more on fuel subsidies, according to revisions proposed for the 2005 budget on June 6. The total includes $1 billion of dollar- denominated debt sold on April 13.

The government may also revise higher the budget deficit to Rp 20.3 trillion, or 0.8 percent of gross domestic product this year, from Rp 19.5 trillion, according to the revisions. The deficit was equivalent to 1.4 percent of the economy in 2004.

Moody's Investors Service has a rating of B2, five levels below investment grade, for Indonesia's long-term local currency debt. Standard & Poor's rates the rupiah debt BB, two levels below investment grade. Both are junk, or high-yield, high-risk designations. -- Bloomberg