Govt to repurchase bonds next week

Govt to repurchase bonds next week

The Jakarta Post, Jakarta

The government is to repurchase bonds maturing between May 25,
2004 and Dec. 15, 2010 through an open auction on March 25, it
stated in a press release on Thursday.

The buy-back move is part of the government's efforts to
redeem maturing bonds, of which Rp 21.1 trillion has been
earmarked for this purpose under the 2004 state budget.

The release added that so far, 19 local and foreign financial
institutions had registered as auction participants: Bank Central
Asia, Bank Niaga, Bank Buana Indonesia, Bank Danamon, Bank Mega,
Bank Lippo, Bank Panin, Bank Mandiri, Bank Negara Indonesia, Bank
Rakyat Indonesia, Citibank NA, HSBC, Deutsche Bank, Standard
Chartered, ABN Amro, Trimegah Securities Tbk, Mandiri Sekuritas,
Danareksa Sekuritas and Bahana Securities.

The buy-back strategy aims to help reduce the burden of the
state budget in covering interest and principals on the
government's domestic debts, which arose from the Rp 450 trillion
in bonds issued to bail out banks during the financial crisis
that hit in 1997.

Part of the buy-back program is funded by bond issuance
proceeds, targeted to reach Rp 32.5 trillion this year. The new
bonds are expected to carry a lower interest rate than those
issued in the wake of the crisis.