Govt to issue Rp 2.5t worth of bonds on Dec. 16

Govt to issue Rp 2.5t worth of bonds on Dec. 16

The Jakarta Post, Jakarta

The government is set to undertake its fourth and final bond
issue this year, worth around Rp 2.5 trillion, on Dec. 16 to help
finance this year's state budget.

A press statement from the Ministry of Finance revealed on
Thursday that the bond would mature on Oct. 15, 2010, and carry a
fixed-rate coupon of 12 percent to be payable twice a year.

The bond issue is part of the Rp 11.7 trillion in bonds the
government has pledged to issue to help refinance part of the
huge tranch of the government's domestic debt that matures this
year. There are some Rp 55 trillion worth of bonds maturing this
year.

In its first three bond issues, conducted in April, September
and November, the government has issued a total of Rp 9.2
trillion worth of bonds.

The government initially planned to issue a total of Rp 7.7
trillion worth of bonds this year, but it later decided to
increase the volume because of its larger financing requirements.

The state budget has been weighed down by the payment of
maturing government bonds totaling about Rp 450 trillion that
were issued in the late 1990s to bail out troubled banks.

To ease that burden on the cash-strapped state budget, the
government has launched more bonds to refinance the maturing
ones.

Elsewhere, the statement said that the auction, to be
organized by Bank Indonesia, will begin at 10.00 a.m. and be
closed at 12.00 a.m.

Anggito Abimanyu, head of the ministry's fiscal analysis body,
said the government would target companies such as insurance
firms and pension funds as the main investors for the bonds.

He did not provide further details.