Indonesia to Raise $900 Million in Samurai Bonds

The Indonesian government will issue samurai bonds to fund infrastructure projects.

Jakarta, 5 Ramadan 1438/31 May 2017 (MINA) – Indonesia will issue yen-denominated government bonds, known as samurai bonds, worth 100 billion yen ($900 million) in its first public issuance in more than 30 years, asia.nikkei.com reported.

The government is issuing three-, five- and seven-year notes worth 40 billion yen, 50 billion yen and 10 billion yen, respectively. The coupon on the five-year notes was priced at 0.89% per year on Wednesday. Issuance is scheduled for June 8.

The bonds were oversubscribed by about 1.9 times, said one person involved in the deal, reflecting renewed interest after S&P Global raised the country’s long-term sovereign debt rating to investment grade earlier this month.

S&P said the government’s “new focus on realistic budgeting” limits the risk of a widening budget deficit.

The government is expected to use the proceeds to accelerate President Joko Widodo’s ambitious infrastructure development program.

Indonesia issued samurai bonds worth 100 billion yen in 2015 and 2016 under a private placement scheme. This year, it changed to a public placement scheme with the aim of attracting a greater pool of investors.

The joint lead arrangers for the sale are SMBC Nikko Securities, Nomura Securities and Mizuho Securities. (T/RS5/RS1)

Mi’raj Islamic News Agency (MINA)