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Indonesia to offer samurai bonds again in 2015
The government has put its yen-denominated bonds, or âsamurai bondsâ, issuance plan back on the table as the debt papers are listed among several foreign-denominated bonds to be issued in 2015
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The government has put its yen-denominated bonds, or 'samurai bonds', issuance plan back on the table as the debt papers are listed among several foreign-denominated bonds to be issued in 2015.
During an investor gathering held on Wednesday, Finance Minister Bambang Brodjonegoro laid out the government's plan to issue four types of foreign-denominated debt papers, covering US dollar global bonds, euro global bonds, US dollar global Islamic bonds or sukuk and the long-awaited samurai bonds.
The foreign-denominated debt papers will be part of the government's effort to generate around Rp 431 trillion (US$35.05 billion) of funds from securities issuances to finance economic growth, as stated in the 2015 state budget.
According to the ministry, about 80 percent ' or Rp 344.8 trillion ' of the funds targeted would be generated from rupiah-denominated debt papers and the other 20 percent ' or Rp 86.2 trillion ' would be raised from foreign-denominated bonds.
The government planned to issue the samurai bonds in 2013 and 2014, but did not proceed with the realization. Bambang previously said that by canceling the plan, the government sought to reduce foreign debt that might increase currency risk stemming from a weakening rupiah.
Meanwhile, if realized, the samurai bonds issuance will be the fourth issuance ever since the government tapped the Japanese fixed-income market in 2009.
Data from Bloomberg shows that the first yen bonds sale took place in 2009, when the Indonesian government raised ¥35 billion ($293.43 million) from 10-year papers.
The second issuance occurred in 2010 with ¥60 billion reaped from the 10-year bonds, followed by the third issuance in 2012 with another ¥60 million from the 10-year bonds.
All of the previous issuances were guaranteed by the Japan Bank for International Cooperation (JBIC).
Robert Pakpahan, director general of the ministry's debt management office, said the upcoming issuance would be partially guaranteed by the JBIC.
'We are thinking of getting 80 percent of the bonds issuance guaranteed by the JBIC and to let the other 20 percent remain not guaranteed. This is a chance for us to test the Japanese market and see if it will accept the papers that are not guaranteed,' he said after attending the investor gathering.
If these papers garnered a positive response, the government might issue similar bonds the following year, he added.
No detailed information was immediately available regarding the amount of funds that the government expected to obtain from the samurai bonds offering.
However, Robert said that it would push for the yen debt papers to be issued in the first half of next year along with US dollar bonds and US dollar sukuk.
Euro global bonds would most likely be offered in the second half of next year, he said.
Herdi Ranu Wibowo, debt capital market head at BCA Sekuritas, estimated that the government would get a positive response from all of its global and yen bond issuances.
'Indonesia remains a prospective market among emerging economies, especially as it has obtained investment grade status from international rating agencies,' he said.
