Indonesia is marketing a benchmark-sized dollar bond in three tranches, joining a flurry of primary market activity in Asia on Tuesday.
(Bloomberg) — Indonesia is marketing a benchmark-sized dollar bond in three tranches, joining a flurry of primary market activity in Asia on Tuesday.
The debt is being offered across three tenors, from 5 years to 30 years, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about the matter. Proceeds from the sale are to be used to repurchase outstanding debt as well as for government expenditure.
Issuers across Asia have been stung by a record credit rout this year, and Indonesia’s government said earlier this year it would be “extra careful” in issuing bonds offshore to avoid locking in a high financing burden.
But spreads on dollar bonds narrowed by the most in two years in August, offering issuers a window of opportunity. Thanks to elevated raw materials prices, Indonesian assets have attracted international funds, with the stock index heading for a record.
The proposed sovereign debt sale is taking place after the country raised some fuel prices, with the government seeking to balance the risk of inflationary pressures against a ballooning bill for energy subsidies.
While officials have said they’d use the budget as an inflation “shock absorber,” that strategy has proved challenging as President Joko Widodo has also pledged to lower the deficit.
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