Monday, April 5, 2010

Daiwa & Nomura handle samurai bonds

Indonesia Goverment, hired Daiwa Securities Capital Markets Co. and Nomura Securities Co. for a $1.1 billion sale of yen denominated bonds or known as Samurai bonds.
The notes, 95 percent backed by the state-owned Japan Bank for International Cooperation (JBIC), will be offered privately by June.
Formerly, government will issue Samurai Bond worth maximum US$1.15 billion by the end of April or early May through JBIC guarantee facility. The government takes advantage of JBIC guarantee to issue samurai bond since the Japanese development bank has AAA rating. Samurai bonds are yen-denominated notes sold in Japan by foreign borrowers.
For the 2010 state budget, the government has a financing need of IDR236.13 trillion to patch up a deficit of 1.6% of GDP and refinance debt. To meet the financing, non-debt and debt sources will also be used.
Non-debt source is targeted to raise IDR2.46 trillion, while gross debt financing is fixed at IDR233.66 trillion consisting of IDR175.06 trillion in T-bond gross issuance IDR24.4 trillion in program loan, IDR33.16 trillion in project loan, and IDR1 trillion in domestic debt.
On July 17, 2009, Indonesia issued the first Samurai Bond worth 35 billion yens (equivalent to US$350 million) through private placement to institutional investors, such as Japanese insurers and banks.

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