Govt may issue Rp 5t bond next week

Govt may issue Rp 5t bond next week

Dow Jones, Jakarta

The government is expected next week to issue the remaining Rp 5 trillion (US$602.40 million) bond of the total Rp 7.7 trillion planned for this year to help the state budget, an official with the Surabaya Stock Exchange said on Monday.

Hindarmoyo Kinuri, the president of the exchange, told reporters the indicative coupon of the bond is between 11 percent and 12 percent, with maturity expected between 5 and 10 years.

The government will list the bond on the Surabaya Stock Exchange next week, he said.

The government issued the first tranche, worth Rp 2.7 trillion, in April. That eight-year bond carries a 12 percent fixed coupon and was priced through an auction at weighted average yield at 12.21 percent.

The government and a handful of local companies are tapping the local debt market as falling interest rates keep demand for bonds healthy.

The government is also expected to issue around $400 million worth of international bonds later this year to help finance next year's state budget. Indonesia will end its $5 billion bailout program with the International Monetary Fund when it expires at the end of this year.