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The government sold Rp 4.1 trillion (US$450 million) of
local-currency bonds Tuesday in its last bond auction of the year.
The eight-year bonds carry a yield of 9.625 percent, the Finance
Ministry's director general for debt management, Rahmat Waluyanto, said
in a statement announcing the auction results.
The government had also offered zero-coupon bonds during the auction,
but none were sold as the bids turned out to be unattractive. Total
bids for the two series of bonds amounted to Rp 10.7 trillion.
With Tuesday's auction, Rahmat said the Finance Ministry had wrapped up
its bond sales for this year, having raised Rp 58.5 trillion in net
proceeds. In total, it has sold Rp 71.9 trillion of rupiah-denominated
bonds this year, apart from the $1.5 billion of dollar-denominated
international bonds it sold in February.
The net proceeds will be used to help finance the 2007 budget deficit,
which is expected to come in at around Rp 58.3 trillion, or 1.5 percent
of gross domestic product (GDP).
The local-currency bonds include the regular monthly issues of treasury
bonds, retail bonds for individual investors, and the newly introduced
treasury bills and zero-coupon bonds.
For next year, the government expects to raise up to Rp 91.6 trillion
in net bond sales, once again to help finance a deficit that is seen at
Rp 73.3 trillion, or 1.7 percent of GDP.
Next year, investors may have a new kind of bond to bid for: the
so-called sukuk bonds, which are based on sharia law, as soon as
legislation governing their issuance is approved by legislators.
Government bond auctions 2007:
------------------------------------ Global bonds US$1.5 billion
Treasury bonds Rp 46.6 trillion
Retail bonds Rp 15.6 trillion
Treasury bills Rp 2.3 trillion
Zero-coupon bonds Rp 7.5 trillion
Debt-switches Rp 14.2 trillion
------------------------------------ Source: Finance Ministry .
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