TEMPO.CO, Jakarta-The government will release a state retail bond with a floating coupon rate, targeting a sales proceed of Rp3 trillion. The Savings Bond Retail (SBR) series SBR002 will be up for sale from April 28 until May 19, 2016.
The bond offering is likely to be oversubscribed as the government has received an offer of almost Rp4 trillion, said Robert Pakpahan, director general of finance and risk management from the Finance Ministry, as quoted by Antara, yesterday, April 28, 2016.
Robert said that the SBR002 has an attractive feature compared to other retail bonds, as it can be used as a guarantee and has an early redemption. The SBR002 has a floor coupon rate of 7.5 percent with a two-year tenor, and will mature on May 20, 2018.
Finance Minister Bambang Brodjonegoro hopes local investors will respond well to the retail bond issuance. The government is aiming to stop relying on foreign investors for project financing and deficit-patching.
The public, he said, must be accustomed to invest in instruments other than banking products, he said.
Right now, the minister said, foreign ownership in Government Securities has reached 39 percent. This is a vulnerable portion, especially if there are sudden capital outflows due to certain issues. Bambang hopes that the share of foreign ownership in state securities could drop to 9.0 percent.
PINGIT ARIA