Indonesia debt roadshow to start on Wednesday

Indonesia debt roadshow to start on Wednesday

NEW YORK (Dow Jones): Indonesia will kick off on July 8 in New
York a roadshow to market a plan to exchange between $8 billion
and $10 billion in debt contracted by the country's financial
institutions into new loans, a source familiar with the offer
said Thursday.

The exchange program is part of a broader agreement between
the country and foreign creditor banks to tackle Indonesia's debt
burden.

After New York, the roadshow will move on to Paris on July 9,
Frankfurt on July 10, Tokyo on July 13, Seoul on July 14 and
Singapore on July 15.

Under the bank debt deal reached in Frankfurt in early June,
creditors of Indonesian banks have the option of rolling over
existing credits into new loans with maturities of one, two,
three and four years with respective yields of 2.75 percent, 3
percent, 3.25 percent and 3.5 percent. The new loans will be
guaranteed by Indonesia's central bank.

IMF Managing Director Michel Camdessus last week wrote to
international banks urging them to back the agreement to roll
over Indonesian private debt.

During the roadshow, Indonesian officials and International
Monetary Fund representatives will also market a plan to rollover
existing trade financing arrangements, the source said.

That plan covers between $4.2 billion and $4.4 billion in
debt. In June, foreign creditors banks agreed in principle to
maintain trade financing at existing levels.

Also to be discussed during the roadshow will be Indonesia's
plan to restructure more than $60 billion in corporate debt via a
new agency dubbed INDRA.

Under the INDRA plan, the Indonesian central bank will provide
foreign exchange risk protection to Indonesian corporations which
agree with their creditors to restructure their external debt for
a period of eight years with a three-year grace period during
which no principal will be repaid.

But sources cautioned that progress on that portion of the
debt deal will be slow.