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Government retail bond issued, offered at lowest rate ever
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Brokers monitor the trading of bonds and other debt papers at a dealing room of Treasury Bank Rakyat Indonesia in Jakarta. (kompas.com/Hendra A Setyawan )
T
he government through the Finance Ministry issued on Friday government retail bond (ORI) 014, the bidding period of which has been set between Sept. 29 and Oct. 19.
The bonds are offered at the lowest rate ever at a 5.85 percent coupon rate per year, prompting a ministry official to express doubt over whether sales would meet the target of Rp 20 trillion (US$1.48 billion).
According to surveys conducted by the Finance Ministry, the ORI might be sold at only Rp 13.4 trillion in total, said the ministry’s risk management director general Robert Pakpahan.
“We expect this to be the period when the interest rates go down [...]. We believe that it’s even good enough if we could get that Rp 13.4 trillion,” Robert said as quoted by kontan.co.id on Friday.
The government collected Rp 19.85 trillion following the ORI issuance when the bonds were sold at a 6.6 percent coupon rate.
However, the government should not worry about getting fewer funds since there were a lot of other sources, he said.
“We could issue global bonds, [or] hold auctions,” Robert said, adding that the ministry had prepared eight government debt paper (SBN) auctions for this year.
The government appointed 18 underwriters for this year’s ORI issuance, including BCA, BNI, BRI, Bank Mandiri, Panin Bank, DBS, Citibank and CIMB Niaga. (dea/bbn)
