These proceeds are well below the indicative target of IDR 20 trillion (approx. USD $1.5 billion) that was set by the government. The low coupon rate - 5.85 percent - is primarily blamed for the poor performance of ORI014 bonds, especially considering tax still needs to be paid. The 5.85 percent coupon for the three-year bonds was the lowest in the history of ORI bonds (since 2006 the Indonesian government has been issuing ORI bonds once per year on average).

Even the three-year government bonds (locally known as SUN) carry a more attractive rate at 6.1 percent. Also the guaranteed interest rate of the Indonesia Deposit Insurance Corporation (IDIC) on rupiah deposits made by commercial banks and rural banks is higher at 6.00 percent.

Generally, interest rates have been declining in Indonesia due to the central bank's push for a lower interest rate environment over the past 1.5 years, slashing its key rate from 7.00 percent to 4.25 percent in a bid to boost credit growth and economic expansion.

Indonesian ORI Bond Series:

ORI Year
Coupon
   
(%)
Maturity Date
Investment
  (in trillion)
001 2006   12,05   08-08-2009    IDR 3.3
002 2007    9,28   28-03-2010    IDR 6.2
003 2007    9,40   12-09-2011    IDR 9.4
004 2008    9.50   12-03-2012    IDR 13.5
005 2008   11,45   15-09-2013    IDR 2.7
006 2009    9,35   15-08-2012    IDR 8.5
007 2010    7,95   15-08-2013    IDR 8.0
008 2011    7,30   15-10-2014    IDR 11.0
009 2012    6,25   15-10-2015    IDR 12.7
010 2013    8,50   15-10-2016    IDR 20.2
011 2014    8,50   15-10-2017    IDR 21.2
012 2015    9,00   21-09-2018    IDR 27.4
013 2016    6,60   15-10-2019    IDR 19.7
014 2017    5,85   15-10-2020    IDR 8.9

Bahas