Govt plans to issue Rp 3t in bonds

The Jakarta Post, Jakarta

The government said on Monday it expected to sell Rp 3 trillion (US$327.86 million) worth of domestic bonds later this month in order to help cover the 2004 state budget deficit.

"We set the indicative amount at Rp 3 trillion due to the relatively favorable market conditions now. Last month we initially targeted to sell Rp 2.5 trillion worth of bonds, but we ended up issuing Rp 3.75 trillion to meet strong demand from investors," the director general of the state treasury at the Ministry of Finance, Mulia Nasution, said.

The FR0025 series bonds, which will be auctioned by the central bank on Oct. 26, will have a fixed coupon rate of 10 percent and will mature on Oct. 15, 2011.

The nominal value for a single bond has been set at Rp 1 million, with coupons to be regularly paid twice a year, on April 15 and Oct. 15.

The government hopes to issue about Rp 23 trillion worth of rupiah-denominated bonds this year to help finance the budget deficit, which is estimated at Rp 26.3 trillion, or 1.3 percent of gross domestic product.

So far this year, the government has sold Rp 17.7 trillion of domestic bonds.

Demand for government bonds has risen over the past few months, in what many say is a sign of growing investor confidence in the country's economy.