Govt may up 2004 global bond issue

Govt may up 2004 global bond issue

Dow Jones, Jakarta

The government planned to sell up to US$600 million in global bonds next year, more than initially planned due to warm investor response during a recent international roadshow, a senior government official said on Monday.

Government officials in October met with investors in Dubai, London and New York to gauge appetite for a sovereign bond from Indonesia. which has not tapped global markets since the 1997- 1998 Asian financial crisis.

The strong demand at this early stage has pushed the government to consider selling $600 million in bonds, up from an earlier plan to issue $400 million, Director General of Financial Institutions at the Ministry of Finance Darmin Nasution said.

The country needs to raise funds from private investors both overseas and at home next year to compensate for funding it will lose when its International Monetary Fund lending program runs out at the end of this year.

Apart from global bonds, the government hopes to sell domestic bonds, and private a number of state-owned companies.

The government plans to name financial advisers for the international bond deal later this month.

A government source told Dow Jones last month that 20 international investment banks, including BNP Paribas, Citigroup, JP Morgan, Deutsche Bank, Credit Suisse First Boston, UBS AG and ING Barings, are vying for the deal.

The government plans to hold another round of roadshows in Singapore, Hongkong and Japan before the year-end.

Moody's Investors Service last month upgraded Indonesia's sovereign rating by one notch to B2, while Standard & Poor's also in the same month raised the country's rating by one notch to B, which are expected to help the sovereign bond issue.