High demand for Indonesia’s $4b bonds

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Indonesian-rupiahIndonesia has successfully sold its largest US dollar bond since the Asian financial crisis in 1998, $4 billion of 10- and thirty-year dollar-denominated bonds at yields sharply higher than those offered in 2013.

The 10-year bonds were priced to yield 5.95 per cent, a sharp increase from Indonesia’s debt sale in April 2013 when it borrowed at a record low of 3.5 per cent. The yield on the 30-year bond was also higher, at 6.85 per cent compared with nine months ago at 6.35 per cent.

Indonesia is currently grappling with a currency that plunged 21 per cent in 2013, the biggest loss in more than a decade, as foreign reserves stayed below $100 billion for a sixth month through November 2013. Record trade and current-account deficits last year prompted Bank Indonesia to raise its benchmark by 1.75 percentage points since early June, an aggressive rate tightening which worked to slow the economy and reduce imports.

The World Bank recently cut its growth forecast for this year to 5.3 per cent. In 2012, Indonesia’s economy grew 6.3 per cent.

Indonesia is seeking to raise a record $29.2 billion from both international and local debt capital markets in 2014, the debt management office said in a statement.

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Reading Time: 1 minute

Indonesia has successfully sold its largest US dollar bond since the Asian financial crisis in 1998, $4 billion of 10- and thirty-year dollar-denominated bonds at yields sharply higher than those offered in 2013.

Reading Time: 1 minute

Indonesian-rupiahIndonesia has successfully sold its largest US dollar bond since the Asian financial crisis in 1998, $4 billion of 10- and thirty-year dollar-denominated bonds at yields sharply higher than those offered in 2013.

The 10-year bonds were priced to yield 5.95 per cent, a sharp increase from Indonesia’s debt sale in April 2013 when it borrowed at a record low of 3.5 per cent. The yield on the 30-year bond was also higher, at 6.85 per cent compared with nine months ago at 6.35 per cent.

Indonesia is currently grappling with a currency that plunged 21 per cent in 2013, the biggest loss in more than a decade, as foreign reserves stayed below $100 billion for a sixth month through November 2013. Record trade and current-account deficits last year prompted Bank Indonesia to raise its benchmark by 1.75 percentage points since early June, an aggressive rate tightening which worked to slow the economy and reduce imports.

The World Bank recently cut its growth forecast for this year to 5.3 per cent. In 2012, Indonesia’s economy grew 6.3 per cent.

Indonesia is seeking to raise a record $29.2 billion from both international and local debt capital markets in 2014, the debt management office said in a statement.

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