Monday, April 23, 2012

LPEI increase bonds issuance to US$500 million

Lembaga Pembiayaan Ekspor Indonesia (LPEI/Indonesian Eximbank) increase bonds issuance from US$300 million to US$500 million. The bonds issuance part of euro medium term notes (EMTN) programme worth equal with US$1.5 billion.
The five-year bonds priced at a yield of 3.9 percent, at the tight end of the final guidance, which was 3.9 percent to 4 percent, and about 22.5bp inside the initial guidance of 4.125 percent.
The deal attracted an order book of $5 billion from more than 230 accounts and the book held together despite the bonds pricing at the tight end and concerns that this would strain pricing. The bonds were predominantly allocated to Asian accounts and fund managers.
Investors viewed Indonesia Eximbank as a proxy for the Indonesian sovereign. While the deal was being marketed on Thursday afternoon, investors felt it offered a decent pick up over the sovereign
Indonesian Eximbank is 100 percent owned by the Indonesian government through the Ministry of Finance. The bank is rated Baa3 by Moody’s and BBB- by Fitch, which is the same as the Indonesian sovereign, as the bank is expected to receive a high level of state support if needed. 

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