Govt swaps bonds with longer-maturity debt

Govt swaps bonds with longer-maturity debt

The government swapped Rp 5.67 trillion (US$579 million) of local-currency debt with longer-maturity debt, the first such transaction in the country.

The government purchased eight series of bonds with maturities ranging from 2006 to 2009, said Mulia Nasution, director general of treasury at the finance ministry.

The government received demand for Rp 7.72 trillion at the close of Thursday's auction in Jakarta.

Indonesia has been selling and buying back local currency bonds and paying off higher-yielding debt.

Indonesia spent more than Rp 600 trillion to bail out banks after the Asian financial crisis of 1997 and 1998, raising funds through so- called recapitalization bonds.

"This move will help change the profile our debt," Nasution said.

"The maturity profile of our debt will improve."

Bondholders and banks bought the government's 11 percent bonds, which mature on Nov. 15, 2020, at a price of 79 cents a dollar, Nasution said.

Indonesia's debt is rated B2, five levels below investment grade, by Moody's Investors Service. It's rated B+, four levels below investment grade, by Standard & Poor's. -- Bloomberg