Govt files $300m bonds with SEC

JAKARTA (JP): Bank Indonesia, representing the government, has formally registered its bond-offering plan with the Securities and Exchange Commission of United States, reports said.

Bank Indonesia has not formally announced the value of the bonds but Reuter reported from New York Friday that the value will be around US$300 million.

The offering will be made through Salomon Bros Inc, Goldman, Sachs & Co, J.P. Morgan & Co and Merrill Lynch & Co.

Proceeds of the bonds, which will mature in 2006, will be used for general funding purposes related to Indonesia's development plans.

Bank Indonesia Governor J. Soedradjad Djiwandono said recently that the proceeds of the bonds, the first to be offered since 1988, would not be used to finance the country's current account deficit.

"It is not the money we want to get but to set a benchmark for private offshore borrowings," he told reporters.

Bond offerings made by Indonesian private companies overseas were generally more expensive than those floated by other countries owing to the absence of government bonds.

By floating the governments' bonds, Indonesian bond issuers will have a benchmark or a guideline in setting up terms and conditions of their bonds.

In the past Bank Indonesia issued a number of bond instruments overseas, including those floated in Germany, Japan, the Netherlands and Kuwait. The latest issuance worth DM300 million was floated in Germany on 24 Oct. 1988. It matured in 1994.

Soedradjad said the planned issuance of the bonds should not be related to the country's current account deficit, which is expected to increase to $8.7 billion in the current fiscal year, which ends in March 1997, from $6.9 billion last fiscal year.(hen)