Govt Upsizes Bond Auction to Rp10 Trillion

Indonesia Finance

Wednesday, 11 January 2012 09:22

Written by Hans GN

Theindonesiatoday.com - The Finance Ministry had on Tuesday (January 10) upsized the government bond auction to Rp10 trillion due to high demand. The incoming bid totaled Rp27.67 trillion.

The government earlier planned to auction two series of treasury bill and three series of government bonds with an indicative target of Rp7 trillion. The proceeds of the bonds will be used to support 2012 budget.

Rahmat Waluyanto, director-general of the Finance Ministry’s debt management department, said investors mostly prefered short term tenor bonds such as Treasury Bill SPN12130111 with the incoming bid totaling Rp8.4 trillion. This series of bond will mature in January 11, 2013.

The government also auctioned Treasury Bill SPN03120411 which will mature in April 11, 2012, with incoming bid reaching Rp5.34 trillion.

For three government bonds, Series FR0060 with a fixed coupon rate of 6.25% recorded incoming bid of Rp2 trillion, Series FR0061 with a fixed coupon rate of 7% booked demand of Rp4.64 trillion and Series FR0058 with a fixed coupon rate of 8.25% recorded bid of Rp7.29 trillion.

However, Rahmat said, the government only absorbed Rp10 trillion, of which treasury bill SPN12130111 accounted for Rp2.35 trillion, treasury bill SPN03120411 amounted Rp1 trillion, government bond series FR0060 Rp800 billion, series FR0061 Rp2.2 trillion and FR0058 Rp3.65 trillion.

"The high demand for government bond from investors is prompted by positive sentiment from the country's debt rating upgrade to the Investment Grade," he said. (hans@theindonesiatoday.com)

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