Indonesia govt to raise $43b from multi-currency bonds in 2016 for budget financing

Finance Minister Bambang Brodjonegoro (middle) and Director General of Financing and Risk Management of Finance Ministry Robert Pakpahan (left) - Photo by Finance Minister Office

The Indonesia government has set a target of raising a total of Rp532.4 trillion ($43.86 billion) by way of bond issuance in 2016 to support its Budget plans, according to a senior official.

The bond issues will be in multiple currency denomination such as US dollar, euro, yen and China’s renminbi (dimsum or panda bond).

Director General financing and risk management of Finance Ministry office Robert Pakpahan told reporters, that 30 per cent of the total issuance (Rp 159 trillion) will be in foreign currency denomination.

The government will also set aside a significant 20 per cent to raise through the Islamic bond or SUKUK financing route. It is yet to decide on the composition of the bond issuance.

The funds will be used to finance the State Budget for 2016. With the bond issue, Indonesia is targeting a deficit of 2.15 per cent of GDP, capital injection for state owned enterprises Rp58.1 trillion, debt-refinancing Rp256 trillion, debt portfolio management Rp3 trillion and T-bills cash management Rp15 trillion.

The government has issued Rp502.36 trillion or 100 per cent of this year’s target. For 2016 targets, government has issued global bond worth $3.5 billion in this month.

“So the net of the government bonds which will be issued is around Rp330 trillion in domestic and foreign currencies. Front loading in December worth $3.5 billion is part of it,” He said.

He said, another 61 per cent of total gross issuance would come in first half of 2016. Beside the bond issuance, government is also looking at bilateral and multilateral loans worth Rp72.9 trillion to finance the budget deficit and government spending.

For the State Budget 2016, government has set a total spending target of Rp 2,095.7 trillion, while revenues stood at Rp 1,822.5 trillion, leaving a deficit of Rp273.2 trillion, or 2.15 per cent of GDP.

Also Read: Indonesia government may raise $1b in global bond issue by year-end

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.