Government Targets Up to US$1 Billion in Inaugural Panda Bond Issuance Tomorrow

Finance Minister Purbaya Yudhi Sadewa has announced that a Yuan-denominated bond, known as a Panda Bond, will be issued on Thursday, 23 July 2026. He stated that for this inaugural Panda Bond issuance, the government is targeting an emission value of up to US$1 billion. "Because this is a new market, we will explore it first. Although demand may be very large, we are limiting the first phase of issuance to US$1 billion," Purbaya said during the APBN KITA press conference at the Ministry of Finance in Jakarta on Tuesday, 21 July 2026. "If necessary, we can conduct another issuance with a larger value a few months later," he added. Purbaya explained that the Bank of China (BOC) has been appointed as the lead underwriter and lead bookrunner. Industrial and Commercial Bank of China (ICBC), CITIC, China International Capital Corporation (CICC), and DBS Bank China will act as joint lead underwriters and joint bookrunners. Meanwhile, Agricultural Bank of China (ABC), China Construction Bank (CCB), and CEXIM have been appointed as co-managers. Purbaya noted that Chinese rating agency China Lianhe Rating Co., Ltd. assigned the Panda Bond an AAA rating with a stable outlook on 1 July 2026. The rating was based on several considerations, including Indonesia’s economic growth, which has remained strong above 5 percent since 2022 and is expected to continue into 2026-2027, supported by effective government policies. "The basis for consideration is that the Indonesian economy continues to grow above 6 percent, has solid economic fundamentals, its position as the largest economy in Southeast Asia, and its resilience to external shocks," Purbaya said. Furthermore, Indonesia’s external debt is considered relatively low with strong repayment capacity, supported by adequate foreign exchange reserves. "The rating agency also assessed that the Indonesian government’s debt ratio is around 40 percent of GDP, which is still considered low," he stated.