Purbaya to raise Panda Bond target above US$1 billion

Finance Minister Purbaya Yudhi Sadewa has announced plans to raise the target for the government’s Panda Bond issuance above US$1 billion. The final decision will depend on the level of investor demand in the Chinese market. “We will increase the Panda Bond target,” Purbaya said during a media briefing in Jakarta on Friday. He explained that the government will continue to monitor market developments, and the exact issuance target will follow the extent of investor interest. “We will see how the market looks. If demand is large, we will enlarge it accordingly,” he added. Purbaya noted that the government’s remaining global bond issuance requirement currently stands at around US$3 billion. If this need can be met through the Panda Bond issuance, the government will maximise the use of this instrument. The optimism stems from high Chinese investor interest in the planned Panda Bond issuance. As a result, the government has decided to postpone the issuance schedule from the original plan of early July to the end of July 2026. The delay is intended to give several large investment managers and banks in China time to complete their internal approval processes before participating in the bond purchase. “The Panda Bond was originally going to be issued in early July, but it turns out investor interest has increased. Some large fund managers or big banks there were late to learn about it, so we are postponing slightly to give them time to submit their proposals to their investment committees,” Purbaya said. He stated that the stronger-than-anticipated investor enthusiasm is the main reason for adjusting the schedule for the renminbi-denominated bond issuance. The Finance Minister views the demand as a positive signal of high Chinese investor interest in Indonesian financing instruments, prompting the government to allow additional time for more optimal participation. “I think it is already good. It means the interest is substantial, so I am postponing it until the end of July,” Purbaya added. With the delayed issuance schedule, the number of participating investors is expected to increase, allowing the funds raised to exceed the initial target. In addition to rising interest from investment managers, Purbaya revealed that several major financial institutions in China have also begun showing interest in participating in the Panda Bond issuance. Some banks have even requested the opportunity to act as underwriters to help broaden the marketing of Indonesian bonds in the Chinese market.