FR0087 posted IDR 16.9 trillion worth of interest, surpassing FR0083’s 20-year long tenor of only IDR 11.2 trillion, at auction of Government Securities (SUN) last Tuesday. Investors are again interested in FR0087 after posting a weighted average yield of 6.21% or 33 bps higher than the previous SUN auction. The auction results are also in the midst of waiting for the announcement of the BI 7-DRRR benchmark interest rate for the January period, which is projected to remain at the level of 3.75%. This projection takes into account low inflation, maintained external stability, and as further steps to accelerate domestic economic recovery.
IIF will issue USD 500 million Global Bond. Indonesia Infrastructure Finance (IIF) plans to issue global bonds (global bonds) for the purposes of a sustainable financing framework. This issue is part of the euro medium-term notes (EMTN) program with a ceiling of up to USD 500 million. The Fitch Ratings rating results pinned the BBB rating on the IIF global bond proposal. The EMTN program rating is in line with IIF’s long-term rating. Meanwhile, Fitch assessed that the supervision and support for IIF was very strong when viewed from the share ownership structure. As is known, IIF is indirectly owned by the Indonesian government and sponsored by the Asian Development Bank (ADB) and the International Finance Corporation (IFC), the World Bank Group. (Investor Daily)
Indonesia’s Debt-to-GDP Ratio Increased to 38.68%. The Ministry of Finance (Kemenkeu) noted that the position of government debt until the end of December 2020 was IDR 6,074.56 trillion. Based on this realization, the debt ratio to gross domestic product (GDP) was 38.68%. The debt ratio increased from the level of 29% against the Gross Domestic Product (GDP) in December 2019. Referring to the State Revenue and Expenditure Budget (APBN) book, even though it has increased, the government debt ratio as of the end of last year is still below the limit regulated by law (UU). For the record, Law no. 17 of 2003 regulates the maximum limit of the government debt ratio at 60%. (Kontan)
Green Shoe Option Benchmark Series and FR0089. The nominal value won which was below the target, made the government carry out an additional SUN auction (green shoe option). The government is again offering FR0086, FR0087, FR0088, FR0083, and FR0089 today. Both FR0087 and FR0088 are offered a weighted average yield at the same level, namely 6.21%. Meanwhile, FR0086, FR0083, and FR0089 were respectively at the 5.19% level; 6.83%; and 6.69%. Investors can again pay attention to the high interest of FR0087 and the FR0083 series, which has a coupon of up to 7.50%.