Govt set for overseas roadshows to sell bonds
Govt set for overseas roadshows to sell bonds
The Jakarta Post, Jakarta
The government will undertake a series of roadshows next month
to a number of the world's major financial centers in a bid to
gauge investor demand for its plan to issue sovereign bonds in
March, Bank Indonesia senior deputy governor Anwar Nasution said
on Monday.
Anwar's statement came amid reports that two investment banks
had been chosen as the co-managers for the bond issue.
The government will officially announce the underwriters on
Tuesday.
Bloomberg quoted unnamed sources as saying that Deutsche Bank
and JP Morgan Chase & Co. would be the lead underwriters for the
bond issue. The two are being selected from six investment firms
competing for the underwriting job. The remaining four are
Citicorp, Morgan Stanley and UBS, Securities and Credit Suisse
First Boston (SCFB).
The report also mentioned that at least three local securities
firms including PT Mandiri Sekuritas, PT Danareksa and PT Bahana
Securities would be appointed to help the two global investment
banks.
Anwar refused to confirm the name of the banks, and so did
Minister of Finance Boediono -- both said that all would be
officially made public as scheduled.
Anwar is a member of a government team tasked to prepare the
bond issue.
On the roadshow plans, he said that it would start early in
February to major financial centers which includes Hong Kong,
London, Chicago, New York, San Francisco and Frankfurt.
He was optimistic about the investor demand for the bond
issue.
"During the past non-deal roadshows, they (potential
investors) were very enthusiastic," Anwar said.
"Even from last week's presentation. The underwriters were
convinced that the bond would meet strong demands and be
oversubscribed."
All six investment banks were last week optimistic that, given
the relatively favorable economic condition at home and globally,
the issue would be a success story. A rupiah that is stable
relative to the weak U.S. dollar, benign inflation, declining
central bank benchmark interest rate and a continued fiscal
consolidation on the state budget, all reflect improvements in
the economy.
They also suggested the government set the bond at a range of
7 to 10 years with a yield of 6 to 7 percent.
The upcoming bond issue will be the first since the 1997-1998
financial crisis, having issued its first global bond worth $400
million in 1996. Aside from the global bond, the government also
plans to issue about Rp 28.5 trillion worth of bonds domestically
this year.
The bonds were scheduled to be worth around US$400 million as
an alternative source of funding to help finance the 2004 state
budget deficit.
But, after the last successful overseas roadshows, the
government is now considering an increase to $500 million.