Govt goes ahead with bond plans

The Jakarta Post, Jakarta

Defying concerns about a delay in its planned global bond issue, the government confirmed on Monday that it would go ahead with the plan as scheduled, saying it would set the price guidelines for the bond offering on Tuesday.

"We will set the pricing for the offering on March 22," Minister of Finance Yusuf Anwar told reporters on Monday, adding that the bonds would be denominated entirely in U.S. dollars.

The remarks came amid speculation that the global bond issue, the second in two years, might be delayed in light of General Motors Corp.'s bonds falling to junk status that has sent the global bond markets reeling.

Dow Jones said that several bond issues have been scuppered in recent days amid volatile markets -- making deals hard to price and more expensive for borrowers, pointing at deals from Thai Military Bank and South Korea's National Agricultural Cooperative Federation as examples.

Echoing Yusuf, Mulia Nasution, the ministry's director general for treasury, also confirmed that the planned issue would take place as scheduled now that the country's ratings are improving.

During the recent roadshows in Hong Kong and Singapore conducted earlier in the month, Mulia said, the response was positive with many investors expressing great interest in the bond issue.

"There has been high demand from investors, thanks partly to the improvement in our rating," Mulia said, adding the government also planned other roadshows to other world financial centers in the U.S. and Europe.

The government plans a bond issue amounting to Rp 43 trillion (about US$4.6 billion) throughout the year, including at least $1 billion in dollar-dominated bonds -- the proceeds of which would be used to help plug the state budget deficit.

Citigroup Inc., Deutsche Bank AG and UBS AG have been appointed to manage the upcoming bond sale.