Monday, January 16, 2006

Indonesia names UBS, JP Morgan, Barclays as lead managers for global bond sale

That would be the first time for Barclays to sell Indonesia government global bonds and the second for both UBS and JP Morgan. The size and timing of the bond sale have yet to be decided, but the proceeds will be used to help cover the state budget deficit and refinance maturing bonds.
Last year the government sold 2.5 billion US dollars worth of global bonds. On October 6, 2005, Indonesia government sold USD 1.5 billion in dollar-denominated global bonds comprised of USD 900 million in 10-year bonds at a yield of 7.6% and USD 600 million in 30-year bonds at a yield of 8.6%. The 10-year and 30-year bonds have a spread of 3.3% and 4.1% respectively over comparable US treasuries. Citigroup, Credit Suisse First Boston and Merrill Lynch were the lead managers.
In April 2005, Indonesia issued global bonds at the amount of US$1 billion matured 2015 with yields 7.435/7.323 percent. Citigroup, Deutsche Bank, and UBS Investment Bank were the lead managers for the transaction.
Indonesia reentered the international market in March 2004 with the issuance of US$1 billion worth of global bonds with coupon rate of 6.75%. JP Morgan and Deutsche Bank were the lead managers.
The government's foreign debts which will mature in 2006 will total 91.71 trillion rupiah (US$10 billion), comprising principal debt of 63.69 trillion rupiah and interest of 28.02 trillion rupiah. Domestic debts or government bonds which will mature in 2006 will reach 74.93 trillion rupiah. They comprise 26.32 trillion rupiah in principal debts and 48.61 trillion rupiah in interest.
The nation's total foreign debts in March 2005 reached 1,282 trillion rupiah or 52 per cent of the gross national product. They include foreign exchange debts of 624 trillion rupiah and debts in the rupiah of 658 trillion rupiah). Of the total debts, 647.7 trillion rupiah consist of state bonds, domestic state bonds of 624.2 trillion rupiah and foreign bonds of US$2.4 billion.
Last year, Paris Club of creditor nations offered an unconditional freeze on debt repayments for Indonesia, the Seychelles and Sri Lanka to help them rebuild their ravaged coastlines after the tsunami that struck on Dec. 26, 2004. Without the debt waiver, Indonesia would have to pay more than US$3 billion in principal alone last year.
Late last month, the finance ministry decided on debt management strategy, that in order to lessen the burden, government should carry out re-profiling (lengthening the maturity of payments).

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