Yusuf to meet investors

Yusuf to meet investors

Bloomberg, Jakarta

Indonesian officials, led by Minister of Finance Jusuf Anwar, will meet international investors next week to gauge demand for the government's planned sale of as much as US$1 billion of bonds.

Jusuf will meet investors in New York on Sept. 26 in a "non- deal roadshow," said Mulia Nasution, director general for treasury at the finance ministry, on Friday. Mulia will brief investors in London the same day, he said.

The sale, Indonesia's second overseas debt offering this year, will help the government cover an estimated Rp 25.1 trillion (US$2.5 billion) budget shortfall this year. The government may raise fuel prices by at least 50 percent in early October to avoid missing the deficit target, State Minister of National Development Planning Sri Mulyani Indrawati said on Sept. 13.

"We are watching the market," Mulia said. "We have to see the market response after the Fed raised its rate." The U.S. Federal Reserve on Sept. 20 raised interest rates by a quarter of a percentage point to 3.75 percent, its 11th increase since June 2004.

Mulia said it's "still too early" to provide details of the bond sale. He said Sept. 16 the government planned to set terms in New York after the investor meetings.

Citigroup Inc., Credit Suisse First Boston and Merrill Lynch & Co. are managing the bond sale.

Standard & Poor's on Sept. 2 lowered its outlook on Indonesia's B+ foreign-currency debt rating to "stable" from "positive." The rating, which S&P raised four times since September 2002, is four levels lower than investment grade. Indonesia's debt is rated B2, five levels lower than investment grade, by Moody's Investors Service.

Investors demanded a yield of 7.25 percent at 4:32 p.m. in Jakarta to hold Indonesia's 7.25 percent bonds maturing in April 2015, according to data provided by Deutsche Bank AG in Singapore. The yield has fallen from 7.7 percent on Aug. 24.