Apr 28, 2011

Indo US$2.5 bio bond set at 5.1%

Indonesian government has set a US$2.5 billion global bond at 5.1%, a source close to the deal told Insider Stories.
Standard & Poor's Ratings Services yesterday assigned its BB+ senior unsecured long-term foreign currency debt rating to a proposed global unsecured bond issuance by the Republic of Indonesia (foreign currency BB+/Positive/B; local currency BB+/Positive/B; ASEAN scale axBBB+/axA-2).
The bond is expected to have a maturity of 10 years and will constitute part of the country's US$9 billion global medium-term notes program.
The ratings on Indonesia are supported by continuing improvements in the government balance sheet and external liquidity, against a backdrop of resilient economic performance and cautious fiscal management. 
The ratings remain constrained by Indonesia's (1) low per capita income; (2) structural and institutional impediments to higher economic growth; (3) relatively high inflation; and (4) vulnerability, albeit reduced, to external shocks, in part because of its shallow domestic capital markets.
Disclosure: No position at the stock mentioned above.

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