Indonesia borrows $3b at record low cost

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Jakarta_Arno Maierbrugger
Skyline of Jakarta (© Arno Maierbrugger)

Indonesia has issued two bonds at a combined value of $3 billion at a record low yield for a 10-year $1.5 billion bond at 3.75 per cent and for a 30-year $1.5 billion bond at 4.75 per cent. The yields are the lowest ever for non-Islamic bonds.

The issuance was heavily oversubscribed, Bank Indonesia said in a statement on April 9. The total order book amounted to $12,5 billion, with more than the half of the investors coming from the US.

“This transaction resulted in oversubscription as much as 4,2 times. The issuance of  the 10-year bond was allocated to asset managers at 68 per cent, banks at 18 per cent, insurance and pension funds at 11 per cent and private banks at 3 per cent. The distribution of 50 per cent made to investor in United States, 20 v to Europe, 17 per cent to Asia (ex. Indonesia), and 13 per cent to Indonesia,” the central bank said.

The 30-year bond had 56 per cent investors from the US.

Both credit and equity markets across southeast Asia have boomed in the past 18 months as global liquidity has targeted the region’s fast-growing, domestically driven economies. Since 2008 Indonesia’s stock market has risen more than 200 per cent, while neighbouring Thailand and the Philippines have performed even better.
Indonesia has obtained the ratings BBB- (stable) by Fitch, Baa3 (stable) from Moody’s, and BB+ (positive) from S&P.
Domestic investment in Indonesia nearly tripled to $9.2 billion in 2012 while net foreign direct investment inflows hit a record $19.9 billion, according to the Asian Development Bank.

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[caption id="attachment_8260" align="alignleft" width="300"] Skyline of Jakarta (© Arno Maierbrugger)[/caption] Indonesia has issued two bonds at a combined value of $3 billion at a record low yield for a 10-year $1.5 billion bond at 3.75 per cent and for a 30-year $1.5 billion bond at 4.75 per cent. The yields are the lowest ever for non-Islamic bonds. The issuance was heavily oversubscribed, Bank Indonesia said in a statement on April 9. The total order book amounted to $12,5 billion, with more than the half of the investors coming from the US. "This transaction resulted in oversubscription as much as 4,2...

Jakarta_Arno Maierbrugger
Skyline of Jakarta (© Arno Maierbrugger)

Indonesia has issued two bonds at a combined value of $3 billion at a record low yield for a 10-year $1.5 billion bond at 3.75 per cent and for a 30-year $1.5 billion bond at 4.75 per cent. The yields are the lowest ever for non-Islamic bonds.

The issuance was heavily oversubscribed, Bank Indonesia said in a statement on April 9. The total order book amounted to $12,5 billion, with more than the half of the investors coming from the US.

“This transaction resulted in oversubscription as much as 4,2 times. The issuance of  the 10-year bond was allocated to asset managers at 68 per cent, banks at 18 per cent, insurance and pension funds at 11 per cent and private banks at 3 per cent. The distribution of 50 per cent made to investor in United States, 20 v to Europe, 17 per cent to Asia (ex. Indonesia), and 13 per cent to Indonesia,” the central bank said.

The 30-year bond had 56 per cent investors from the US.

Both credit and equity markets across southeast Asia have boomed in the past 18 months as global liquidity has targeted the region’s fast-growing, domestically driven economies. Since 2008 Indonesia’s stock market has risen more than 200 per cent, while neighbouring Thailand and the Philippines have performed even better.
Indonesia has obtained the ratings BBB- (stable) by Fitch, Baa3 (stable) from Moody’s, and BB+ (positive) from S&P.
Domestic investment in Indonesia nearly tripled to $9.2 billion in 2012 while net foreign direct investment inflows hit a record $19.9 billion, according to the Asian Development Bank.

Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

 

 

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