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