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Government targets millennials in new retail bond issuance
The bonds will mature on July 10, 2021, but the ministry will allow an early redemption period from July 27 to Aug. 4 next year.
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An official of state-owned Bank Rakyat Indonesia (BRI) monitors transactions of government bonds in the bank's dealing room. The Finance Ministry expects to raise Rp 2 trillion (US$142.5 million) from two-year retail bonds SBR007 series currently being offered to the public. (JP/File)
The Finance Ministry is expecting more domestic investors, especially millennials, to purchase its two-year retail saving bonds series 007 (SBR007), which are available to the public from July 11 to 25.
"From the past retail saving bonds offered online, we saw a change in our investor profiles. New investors, especially millennials, dominated the purchase of the bonds. We are expecting the same thing to will happen in this issuance,” the ministry’s financing and risk management director general, Luky Alfirman, said in Jakarta on Thursday.
Luky said the SBR007 bonds, which have a total value of Rp 2 trillion (US$142.5 million), were being offered with minimum and maximum purchases of Rp 1 million and Rp 3 billion, respectively, and could not be traded on the secondary market.
The bonds will mature on July 10, 2021, but the ministry will allow an early redemption period from July 27 to Aug. 4 next year, he said.
He added that the bonds would bear a floating interest rate that would be adjusted in line with the developments of Bank Indonesia’s (BI) benchmark interest rate. However, the floating rate would be limited with a fixed floor rate of 7.5 percent per annum.
The SBR007 series’ floor interest rate is slightly lower than the 7.95 percent and 8.15 percent offered, respectively, by the last two series, SBR006 and SBR005.
