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Today's Headlines Bond Issuance

  • Indonesia to Sell 12 trln of Rupiah-Denominated Government Bonds on Tuesday

    Indonesia to Sell 12 trln of Rupiah-Denominated Government Bonds on Tuesday

    The Indonesian government will offer rupiah-denominated government bonds (Surat Utang Negara or SUN) to investors between 10:00 and 12:00 am on Tuesday (29/03). The bond sale has an indicative target of IDR 12 trillion (approx. USD $909 million) but this target can be up-sized to IDR 18 trillion. Tomorrow's bond sale, proceeds of which are to be used to finance Indonesia's 2016 State Budget, involves four series (SPN12170302, FR0056, FR0073, and FR0072). The tender is open to both institutional investors and individual investors.

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  • Indonesia Records Biggest-Ever Islamic Bonds (Retail Sukri) Sale

    Indonesia Records Biggest-Ever Islamic Bonds (Retail Sukri) Sale

    As predicted, demand for Indonesia's sharia-compliant government retail bonds (Sukuk Negara Ritel, abbreviated Sukri) remains strong and is growing. In fact, Indonesia's Finance Ministry released a statement on Monday (07/03) that said Southeast Asia's largest economy recorded its biggest ever sale of Sukri bonds. Between 19 February and 4 March 2016 Indonesia offered the three year SR-008 Islamic bond series (carrying a fixed coupon of 8.3 percent per year), raising IDR 31.5 trillion (approx. USD $2.4 billion).

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  • Indonesia to Sell Islamic Bonds (Sukuk) on Tuesday

    Indonesia's Finance Ministry will sell rupiah-denominated Islamic bonds (known as Sukuk) on Tuesday (26/01). The ministry set an indicative target of IDR 4 trillion (approx. USD $288 million). Proceeds from the bond sale will be used to finance the government's budget deficit. This deficit is estimated to reach 2.15 percent of gross domestic product (GDP) in the 2016 State Budget.

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  • Stock Market Indonesia: Performance Jakarta Composite Index in 2015

    Stock Market Indonesia: Performance Jakarta Composite Index in 2015

    The last trading day of 2015 on the Indonesia Stock Exchange has passed and now it is time to look back on the performance of Indonesia's benchmark stock index (Jakarta Composite Index) and the rupiah during 2015. The year 2015 was a hectic year, characterized by volatile behavior due to uncertainty about the timing of the looming US interest rate hike (which was finally decided upon by the Federal Reserve in December 2015) and the economic slowdown of China.

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  • Government of Indonesia to Front Load Bonds in 2016

    Government of Indonesia to Front Load Bonds in 2016

    The Indonesian government will engage in front loading, issuing 61 percent of next year's total planned state bonds - worth IDR 532.4 trillion (approx. USD $38.6 billion) - in the first half of 2016. Proceeds are used to finance the 2016 State Budget. Earlier, on 2 December 2015, the government had already sold USD $3.5 billion worth of bonds to cover a shortfall in the 2016 State Budget, deliberately ahead of the possible US interest rate hike in mid-December (as this move is expected to reduce investor appetite for emerging market assets).

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  • Indonesia to Issue Global Bonds, OJK to Boost Issuance of Corporate Bonds

    Indonesia to Issue Global Bonds, OJK to Boost Issuance of Corporate Bonds

    The government of Indonesia plans to issue (foreign currency-denominated) global bonds worth USD $10 billion to cover a shortfall in the 2016 State Budget. These global bonds would be part of a total of IDR 510 trillion (approx. USD $37 billion) worth of bonds that the government plans to sell in 2016. Scenaider Siahaan, Director of Borrowing Strategy at Indonesia's Finance Ministry, said about USD $4 billion of these global bonds are US dollar-denominated. For such bonds, the government usually appoints Bank of America Merrill Lynch, CIMB, Citigroup, and HSBC as book-runners.

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  • Indonesia Steps Up ORI and Sukri Bond Issuances in 2016

    Indonesia Steps Up ORI and Sukri Bond Issuances in 2016

    The Indonesian government will increase retail bond issuances in 2016. Robert Pakpahan, General Director of Debt Management at the Ministry of Finance, said the government will issue conventional retail bonds, known as ORI (Obligasi Negara Ritel Indonesia), twice in 2016. Furthermore, the government plans two rounds of sharia-compliant government retail bond (Sukuk Negara Ritel, or abbreviated Sukri) issuances next year. These bonds are only available to domestic investors.

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  • Moody’s Assigns (P)Baa3 Rating to Indonesia’s Samurai Bonds

    Moody’s Assigns (P)Baa3 Rating to Indonesia’s Samurai Bonds

    The Samurai (yen-denominated) bonds that are to be issued by the Indonesian government (through private placement) received a provisional rating of (P)Baa3 (stable outlook) from Moody’s Investors Service. Part of the Samurai bonds to be used by the government are without guarantees from the Japan Bank for International Cooperation (JBIC). It will be the first time for Indonesia to issue unguaranteed Samurai bonds since 1983 and thus the issuance serves as a test to measure Japanese investors’ confidence in Indonesian assets.

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  • Indonesia to Sell Unguaranteed Samurai Bonds to Japanese Investors Soon

    Indonesia to Sell Unguaranteed Samurai Bonds to Japanese Investors Soon

    The Finance Ministry of Indonesia started to market multi-tranche Samurai (yen-denominated) bonds, partially without guarantees from the Japan Bank for International Cooperation (JBIC), a Japanese public financial institution. It will be the first time that Indonesia issues unguaranteed Samurai bonds and thus the result will inform how confident Japanese investors are in Indonesia’s debt markets. Previously, all Samurai bonds issued by the Indonesian government were guaranteed by JBIC.

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  • Investor Appetite for Indonesia’s Euro-Denominated Bonds Declined

    Investor Appetite for Indonesia’s Euro-Denominated Bonds Declined

    According to data released by the Indonesian Finance Ministry, Indonesia collected 1.25 billion euro (approx. USD $1.4 billion) through the issuance of 10-year euro-denominated bonds, yielding at a discount of 3.555 percent, on Thursday (23/07). With incoming bids at 1.9 billion euros, it is clear that investor appetite for Indonesia’s euro-denominated bonds declined compared to the country’s first euro-denominated bond issuance in July 2014 (which was oversubscribed 6.7 times and could therefore carry a yield of 2.976 percent only).

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Latest Columns Bond Issuance

  • Bonds Indonesia: Wijaya Karya & Jasa Marga Eye Nasi Goreng Bonds

    Two state-controlled companies are planning to issue global rupiah-denominated bonds (often called nasi goreng bonds). Construction company Wijaya Karya, which is listed on the Indonesia Stock Exchange, plans to issue up to USD $500 million of nasi goreng bonds in the second half of 2017. Besides the nasi goreng bonds, the company also plans to sell up to IDR 5 trillion of rupiah-denominated bonds on the domestic market.

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  • Bond Market Indonesia: Sumber Alfaria Trijaya to Refinance Debt

    Bond Market Indonesia: Sumber Alfaria Trijaya to Refinance Debt

    Often companies issue (new) bonds to settle debt that is to mature soon. This strategy is called (debt) refinancing. This is particularly attractive for a company when the country's interest rate environment - set by the central bank - is easing. Sumber Alfaria Trijaya, listed on the Indonesia Stock Exchange, is one of the companies that uses this tactic. Over the next couple of years the company plans to issue IDR 3 trillion (approx. USD $226 million) worth of bonds, divided in two series, to refinance its existing bonds.

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  • Bond Market Indonesia: Euro Bonds Sales a Success, Samurai Bonds Next

    Bond Market Indonesia: Euro Bonds Sales a Success, Samurai Bonds Next

    The Indonesian government sold €3 billion worth of euro-denominated bonds (Surat Utang Negara, or SUN) on Tuesday (07/06) consisting of €1.5 billion of 7-year tenure bonds with a yield of 2.772 percent and €1.5 billion of 12-year tenure bonds with a yield of 3.906 percent. Combined, the issuance was oversubscribed 1.79 times with a total book order for the dual-trance bonds at €8.36 billion. Robert Pakpahan, Director General of Financing and Risk Management at Indonesia's Finance Ministry, said funds will be used to finance the 2016 budget deficit, which is expected to widen to 2.48 percent of GDP.

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  • Strong Demand for Indonesia's Sharia-Compliant Retail Bonds (Sukri)

    Strong Demand for Indonesia's Sharia-Compliant Retail Bonds (Sukri)

    There is strong demand for Indonesia's sharia-compliant government retail bonds (in Indonesian: Sukuk Negara Ritel, abbreviated Sukri). Since the launch of series SR-008 on Friday (19/02), a number of sales agents have run out of quota. These financial institutions now request additional quota from the government. The three year SR-008 series carries a fixed coupon of 8.3 percent per year (and is tradable on the secondary market). The government of Indonesia targets to collect up to IDR 30 trillion (approx. USD $2.2 billion) in funds from the issuance. Sukri bonds are only available to Indonesian citizens.

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  • Rupiah Exchange Rate Indonesia: Why Did it Appreciate on Wednesday?

    The Indonesian rupiah exchange rate appreciated 0.76 percent to IDR 12,481 per US dollar on Wednesday (21/01) based on the Bloomberg Dollar Index. The performance of the rupiah was in line with most other emerging Asian currencies as Japan’s yen strengthened (against the US dollar) after Japan’s central bank announced to maintain an accommodative monetary policy in an attempt to boost inflation to two percent (y/y). Furthermore, speculation about quantitative easing in Europe boosted attractiveness of riskier Asian assets.

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  • Rupiah Update Indonesia: Stronger on US Jobs Data

    Rupiah Update Indonesia: Stronger on US Jobs Data

    In line with the performance of other Asian emerging currencies, Indonesia's rupiah exchange rate appreciated on Monday (12/01) as the fall in US wages (released late last week) caused speculation that the Federal Reserve will - for now - delay its plan to start raising US borrowing costs. Despite solid growing US non-farm payrolls in December 2014, US wages (average hourly earnings) fell the most in eight years. Indonesia’s rupiah appreciated 0.38 percent to IDR 12,599 per US dollar according to the Bloomberg Dollar Index.

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  • Government Issues Indonesian Retail Government Bonds (ORI)

    Government Issues Indonesian Retail Government Bonds (ORI)

    In an attempt to strengthen the domestic investor base and to meet financing of the Revised 2014 State Budget (APBN-P 2014), the government offers Indonesian Retail Government Bonds (Obligasi Negara Ritel Indonesia, abbreviated ORI) again. This is the 11th time, the government issues ORI bonds since its first launch in 2006. The ORI series ORI011 is offered in the period 1-16 October 2014 with a coupon rate of 8.5 percent and a tenor of three years. The minimum allowed order is IDR 5 million and the maximum IDR 3 billion per individual.

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  • Rupiah Exchange Rate Update: Euro Bonds and Stronger US Dollar

    Rupiah Exchange Rate Update: Euro Bonds and Stronger US Dollar

    The Indonesian rupiah exchange rate depreciated slightly on Thursday (03/07). The US dollar gained as markets reacted to Wednesday’s ADP nonfarm payrolls report which showed that 281,000 jobs were added in the US private sector in June 2014, thus exceeding expectations. Furthermore, the market is optimistic that US employment data, released later today, will be positive too. According to the Bloomberg Dollar Index, the currency of Indonesia depreciated 0.04 percent to IDR 11,918 per US dollar.

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