RI to sell overseas bonds in 2005 in several phases
RI to sell overseas bonds in 2005 in several phases
Shanthy Nambiar and Wahyudi Soeriaatmadja, Bloomberg/Jakarta
Indonesia may sell bonds overseas next year in several phases as part the government's plan to raise as much as US$1.5 billion abroad, an official said. It plans to meet potential investors after mid-January.
"We should issue it gradually, in amounts that wouldn't prompt us to have to raise the yields," from current levels, Coordinating Minister for the Economy Aburizal Bakrie said on Thursday in Jakarta.
The government is considering selling between $1 billion and $1.5 billion of debt, Mulia Nasution, director general of Treasury at the Finance Ministry, said on Nov. 8. Indonesia may also sell bonds that comply with Islam's ban on paying interest for the first time next year as part of this proposal, Finance Minister Anwar Jusuf's said yesterday.
Indonesia's $208 billion economy is forecast by the government to expand 5 percent this year and 5.5 percent next year. Higher growth and improved credit ratings may help lure overseas investors. The nation's credit rating was raised one level to B+ by Standard & Poor's today because of the "declining debt and debt-servicing burden" and increased stability in Southeast Asia's largest economy.
The 2014 dollar-denominated bond yielded 6.78 percent at 12:44 p.m. in Jakarta, falling from 6.82 percent yesterday, according to Deutsche Bank AG prices. The risk premium, or extra yield borrowers pay relative to U.S. Treasuries, was 2.6 percentage points, down from as high as 4.52 points on June 3.
Indonesian officials, including Bakrie and Anwar, plan to travel overseas, including Europe, to gauge investor demand for the bonds after mid-January, Bakrie said. Earlier, Indonesia said it plans to meet with banks and investors in Singapore, Hong Kong, London and New York.
Indonesia sold $1 billion of 10-year bonds in March, its largest overseas debt sale, drawing demand for more than eight times the amount offered. JPMorgan Chase & Co. and Deutsche Bank AG helped manage the sale.