TEMPO.CO, Jakarta - The Indonesian government plans to issue 100 billion yen worth of Samurai bonds in three series: RIJPY0818, RIJPY0820, and RIJPY0825.
SMBC Nikko Securities Inc., Nomura Securities Co. Ltd., and Mizuho Securities Co. Ltd. will be the lead arrangers of the bond issuance, the Directorate General of Risks and Financing Management of the Ministry of Finance noted in its press statement received here on Tuesday.
The bonds are to be issued under a private placement format on August 13, with Japanese qualified institutional investors as their target.
The RIJPY0818 and RIJPY0820 are the first to be issued without a Japan Bank for International Cooperation (JBIC) guarantee, with diversified investors in the Japanese debt market.
The RIJPY0818 is worth 22.5 billion yen, with a three-year tenure and a 1.08 percent coupon rate due to mature on August 13, 2018. The RIJPY0820 is also worth 22.5 billion yen, with a 1.38 percent coupon rate and a five-year tenure due to mature on August 13, 2020.
Meanwhile, the RIJPY0825 is to be issued through a Guarantee and Acquisition toward Tokyo market Enhancement (GATE) program from JBIC that has been started since the early issuance of Samurai bonds in April 2010.
The RIJPY0825 is worth 55 billion yen with a 10-year tenure, a coupon rate of 0.91 percent, and a maturity date of August 13, 2025.
After a roadshow in April, the government announced the book-building process, with an initial reference to the yen swap rate on the offer side for Non-JBIC guaranteed bonds RIJPY0818 and RIJPY0820 respectively at +70/100 basis points (bps) area and +80/130 bps area for the three-year and 15-year tenures while the JBIC guaranteed bond RIJPY0825 at +20/30 bps area for a 10-year tenure.
The book-building process, with a wide coverage of investors, has enabled the government to get a price on the offer side of the yen swap rate at +87 bps, +108 bps, and +27 bps for RIJPY0818, RIJPY0820, and RIJPY0825 respectively.
The Japanese investors have responded positively to the Samurai bond issuance, with demand mostly coming from the central and regional banking sectors as well as life and non-life insurance companies.
The non-JBIC guaranteed bonds RIJPY0818 and RIJPY0820 received 100 percent allocation from the order book while the JBIC guaranteed bond RIJPY0825 received 69.97 percent allocation, or 55 billion yen from a total offer of 78.6 billion yen.
The distribution is based on the type of investors for RIJPY0818 and RIJPY0820 comprising 17.8 percent for city banks, 1.3 percent for trust banks, 29.1 percent for public funds, 3.3 percent for life insurance, 7.1 percent for regional banks, 0.2 percent for community banks, and 41.1 percent for others.
The RIJPY0825 is 65.5 percent for city banks, 5.8 percent for specialized banks, 0.9 percent for public funds, 8.7 percent for life insurance, 1.8 percent for property insurance, 4.2 percent for regional banks, 12.2 percent for community banks, and 0.9 percent for others.