* Indonesia raises $4.3 bln to fund coronavirus effort
* Issues longest-dated dollar bond in Asia
* Asian life insurers, U.S. funds biggest investors (Adds Indonesia finance minister comments)
HONG KONG/JAKARTA, April 7 (Reuters) - Indonesia has raised $4.3 billion, including the longest-dated U.S dollar bond ever issued by an Asian nation, to help the government fund its battle against coronavirus, the country’s finance minister said.
The deal was finalised in the United States on Monday and sold in maturities of 10.5 years and 30.5 years, worth $1.65 billion each, with a 50-year tranche worth $1 billion.
It was Indonesia’s largest-ever bond, according to a term sheet reviewed by Reuters, which showed Indonesia will use the cash raised to partly “fund its COVID-19 relief and recovery efforts”.
“We took the opportunity for the 50-year bonds because investor preferences for long-term maturities were very strong,” Indonesia Finance Minister Sri Mulyani Indrawati told reporters later on Tuesday.
The 50-year bonds were priced with 4.5% coupon rate, which she said is lower than coupon rate priced for a 10-year government bond issued by Indonesia in 2018.
Asian life insurers, especially some based in Taiwan as well as U.S. fund managers, were the largest investors, according to two sources with direct knowledge of the matter. The sources could not be named because they were not authorised to speak to media.
“The mood in the market is starting to feel better, investors are starting to think we could be moving towards the end of the tunnel,” a banker working on the deal said.
The deal was carried out virtually, with bankers working on the transaction unable to travel to Jakarta, which would have been normal practice.
Indrawati said the proceed of the bond sales would also help increase foreign exchange reserves at Bank Indonesia, which has seen a drop of $9.4 billion in March to $121 billion as the central bank used some of its reserves to defend the rupiah.
The government is also in talks with a number of multilateral banks to secure loans totalling $7 billion to help finance its COVID-19 relief efforts.
Indonesia’s coronavirus cases stood at 2,738 on Tuesday, with 221 confirmed deaths - the highest number of fatalities in Asia outside China.
Fifty-year bond deals priced in local currencies have been held in the past, Refinitiv data showed. South Korea raised 1.1 trillion won through a 50-year bond in September 2016 that at the time was worth $1 billion.
Indonesia’s government said on Monday it had raised its estimated 2020 net bond issuance to 549.6 trillion rupiah ($33.55 billion) to cover the country’s widening fiscal deficit.
It also listed a plan for sales of 449.9 trillion rupiah ($27.47 billion) worth of “pandemic bonds” to cover additional spending for the COVID-19 response.
$1 = 16,380.0000 rupiah Editing by Jacqueline Wong, Larry King
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