JAKARTA (TheInsiderStories) – Indonesian will sale two dual-currency government bonds for US$750 million (Rp10.72 trillion) in RI0929 series and €750 million in RIEUR0926 series, as a part of state budget financing, stated by the Financing and Risk Management General Directorate of Finance Ministry in Jakarta, Wednesday (06/12).
This is Indonesia’s third dual-currency bonds following 2017 and 2018. Maturity for the US Dollar bond is 10 years, while the Euro bond is 7 years. Coupon for the Euro bond is 1.45 percent while the US Dollar bond is 3.4 percent. Furthermore, the yield is set as 1.487 percent and 3.45 percent respectively.
The global issuance value of US dollar bonds is smaller than last year’s dual-currency issuance of $ 1 billion. The coupon rate and the yield of global bonds last year were also greater at 4.1 percent and 4.13 percent respectively.
“In this transaction, the RIEUR0926 series was successfully issued with the lowest coupon rate throughout the history of issuance of Euro denominated government bonds,” said official statement.
It is explained that the final pricing for the series is 30 bps lower than the initial target price, mid-swap MS+175 bps area. This is Indonesia’s government sixth Euro government bond and the second in SEC-Registered format, as Indonesia is trying to cover more investors in Europe.
Not only the Euro, but the official also mentioned that the final pricing for RI0929 is 30 bps lower than the initial target at 3.75 percent.
The bond has Baa2 from Moody’s, BBB from Standard & Poor’s, and BBB from Fitch. The official claimed that the Standard & Poor’s rating upgrade was one of the causes of issuing the dual-currency bonds in SEC-Registered format.
Issuance of these government bonds will be listed separately in Singapore Stock Exchange dan Frankfurt Stock Exchange.
Joint book-runners for the transaction are Citigroup, Credit Agricole CIB, Deutsche Bank, HSBC, Mandiri Sekuritas, and Standard Chartered Bank. Meanwhile, PT Bahana Sekuritas and PT Trimegah Sekuritas Indonesia Tbk (IDX: TRIM) are the co-managers.
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