Luky Alfirman
Director General of Financing of Finance Ministry and Risk Luky Alfirman. Photo: Special

JAKARTA (TheInsiderStories) – Indonesian government through the Ministry of Finance (MoF) is targeting to raised around Rp 80 trillion (US$5.67 billion) from the issuance of 10 retail bonds, both conventional and Sharia. The target is obtained by issuing 10 debt instruments this year.

Director General of Financing of Finance Ministry and Risk Luky Alfirman explained, there are 4 types of debt instruments to be issued this year, namely Indonesian Retail Bonds, Retail Savings Bond, Retail Sukuk, and Savings Bonds. “We will publish these four types of instruments flexibly so the total publishing will reach 10 times this year,” he said.

“Issuance of 10 times this debt instrument will be more than last year which was only 5 times,” he added.

With the issuance of these bonds, the government hopes to embrace more retail investors. This year, the government targets to attract 100 thousand retail investors.

“Since the issuance of the previous SBR005, we have used Single Investor Identification so the number of registered investors is truly a single investor, not duplicated as before,” he said.

As part of the 10 times issuance of bonds this year, the government launched the sukuk savings series 003 (ST-003). This instrument will be marketed from 1-20 February 2019 with a minimum purchase of Rp 1 million and a maximum of Rp 3 billion.

The government sets an 8.15 percent coupon for this instrument. This coupon is obtained from a reference rate or BI 7 days reverse repo rate of 6 percent plus a fixed spread of 2.15 percent. This instrument is non-tradable and has a 2 year tenor.

“From the issuance of the sukuk savings series 003, we target raising fund of Rp 2 trillion,” he said.

Luky added, the issuance of debt instruments was intended to finance the government budget, including the implementation of physical and non-physical development. In addition to issuing retail bonds in the country, the government also plans to issue debt instruments in foreign currencies.

“At present, we are conducting a roadshow to see market conditions before issuing global sukuk. After that, we can only find out the time and rate of the instruments issued,” he said.

This year, according to Affirman, finance ministry still tends to choose to issue 4 types of global debt instruments, namely global bonds, global sukuk, samurai bonds and euro bonds. Global sukuk issuance will also be issued in green sukuk.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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