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Indonesia likely to drop Samurai bonds issuance in 2013
January 21, 2013 / 12:10 PM / in 5 years

Indonesia likely to drop Samurai bonds issuance in 2013

JAKARTA, Jan 21 (Reuters) - Indonesia is likely to drop plans to issue Samurai bonds this year due to the stronger yen and uncertainty over bond guarantees, an official at the debt office in the finance ministry on Monday.

The issuance of yen-denominated bonds requires a guarantee from the Japan Bank for International Cooperation, or JBIC.

“In 2013, I don’t plan to take any yen because Samurai bonds requires a JBIC guarantee and the last guarantee was in 2012,” said Robert Pakpahan, head of the debt office, told Reuters in an interview.

He added that the recent strengthening of the yen, while the rupiah has been falling, was a major factor in the decision.

The proportion of foreign currency bonds out of the government’s total issuance this year is likely to fall to 14.5 percent from 20 percent last year.

The G20 economy plans to hold a road show in March for its planned two tranches of global dollar bonds, to be issued in the first and second halves of the year.

It also plans to sell its first domestic dollar-denominated bonds in the second half of the year. It estimates investor appetite of between $0.5-1.0 billion, but Pakpahan doubted the issue would be as high as $1 billion.

It also plans to issue its first retail sharia bonds on Feb. 8, he said.

Reporting by Rieka Rahadiana, Adriana Nina Kusuma and Jonathan Thatcher; Editing by Ron Popeski

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