RI Issues Panda Bonds Today, Purbaya Says Investor Interest is Strong

The Indonesian government officially offered its yuan-denominated bonds, known as Panda Bonds, on Thursday. Finance Minister Purbaya Yudhi Sadewa stated that investor interest in the instrument has been quite high, although final results are not yet available. “The value is good, but I don’t know the final result yet because tomorrow, Friday if I’m not mistaken, is the book closing,” Purbaya said in Jakarta on Thursday.

According to Purbaya, one factor making Indonesia’s Panda Bonds attractive is the AAA rating obtained from Chinese rating agency Lianhe Credit Rating. He dismissed any doubts regarding this achievement. “It’s clear we have an AAA rating, so there’s no question about it,” he said.

The government is targeting to raise up to US$1 billion from this inaugural issuance. Purbaya explained that the Panda Bond issuance is part of a strategy to expand financing sources and reduce dependence on US dollar-denominated bonds. “We are diversifying to Japan, Australia, and China. The Chinese market is very strong,” he noted.

He added that the shift is beneficial as it significantly reduces Indonesia’s dependence on the US dollar. A portion of the proceeds will also be used to help finance the state budget deficit, while the rest will be allocated for government spending.