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.

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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.

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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)

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