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JBIC agrees to guarantee
Samurai bonds, project
loan

The Japan Bank for International Cooperation (JBIC) has agreed to provide a guarantee for the Indonesian government’s Samurai bonds worth ¥60 billion (US$738 million) and issued in Japan this month.

The guarantee signed on Monday with the Indonesian government in Jakarta is the third guarantee provided under JBIC’s Guarantee and Acquisition Towards Tokyo Market Enhancement (GATE) facility.

This follows similar guarantees signed by the Indonesian government in July 2009 and November 2010.

The Finance Ministry’s debt management office interim head Robert Pakpahan said on Monday that the settlement of the bonds, which were offered through the private placement format, would be executed on Nov. 22.

SMBC Nikko Securities and Mizuho Securities are joint lead arrangers while Sumitomo Banking Corporation is the commissioned company for bondholders.

“The pricing for the bonds was conducted on Nov. 6, 2012 with a maturity period of 10 years and a coupon rate of 1.13 percent,” Robert said during a press conference at his office in Jakarta.

He said that the rate was the lowest in the Samurai bonds history indicating Japanese market confidence. During the issuance in 2009 and 2010, the rates stood at 2.73 percent and 1.6 percent respectively.

“Throughout 2012, Indonesia had received investment grade ratings from at least four rating agencies. The macroeconomic condition has also been very stable with robust growth and low inflation. These factors have engendered more trust in investors,” Robert said.

“The rate is much lower. We can also pay it with a more favorable rate because the rupiah is relatively strong,” director of government bonds with the Finance Ministry Loto Srinaita Ginting said.

With the issuance of the Samurai bonds, the Indonesian government’s total outstanding loans to Japan amounted to Rp 288 trillion ($29.9 billion), according to Robert.

Robert also said that with the Samurai bonds guarantee, the government had managed to realize 98.93 percent of its state bond issuance target for the year 2012.

In addition to securing a guarantee from JBIC, the Indonesian government also managed to secure an agreement for a project loan.

“The project loan is called as the Scattered Transmission and Substations Package 8 loan. This loan will be allocated for projects under the State Electric Company [PLN],” Robert said.

The loan for the PLN is worth around ¥2 million. PLN president director Nur Pamudji said that the loan would be utilized to finance electricity infrastructure development in Jakarta and Gas Insulated Switchgear (GIS) projects in the western part of Semanggi, Daan Mogot and Karet.

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