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Bond Market News
Indonesia to Buyback Dollar Bonds, First ever by a Southeast Asian nation
September 15, 2021
The Republic of Indonesia has launched a tender offer for eight of its dollar bonds maturing between 2022 and 2026, the first buyback of dollar bonds by a South-east Asian sovereign, as per Business Times. The tender offer was launched alongside its $1.84bn USD and EUR issuance that was priced on Monday. The EUR issuance is the first bond from the sovereign under its Sustainability Development Goals (SDG) framework with one bookrunner commenting, “Indonesia is finding new ways to meet new investors, which is in the right direction not just because ESG wrappers are environmentally friendly but also because there is commercial advantage to it given that pricing is a big factor for the sovereign.” Proceeds from the new USD issuance will be used towards the buyback, details of which are as follows:
The tender offer expires on September 17 and settlement is on September 23. Handy Yunianto, fixed income analyst for Mandiri Sekuritas said that the repurchase offer appeared to be an effort to “reprofile its debts to reduce refinancing risks with longer-tenor bonds that lock at a now relatively low yield,” and added that the strategy may be linked to expectations of higher interest rates as the US Fed tapers their asset purchase program.
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