Indonesia mulls tap of 7¼% dollar-denominated global bond of 2015

By Paul A. Harris

St. Louis, Aug. 26 - The Republic of Indonesia is considering doing a tap of its dollar-denominated 7¼% global bond due April 20, 2015 (B2/B+), according to a market source.

Early Friday in Asia the bond was trading in a 97.50 bid, 98 offered context, the source said. Earlier in the week, a trader spotted it as low as 96.625 bid.

In early June the bond had traded at 101.25.

Recent weakness in the Indonesian currency, in addition to inflation scares and political tensions caused by the government's cancellation of fuel subsidies due to escalating fiscal costs stemming from record crude oil prices, have caused Indonesian debt to sell off, according to the market source.

On April 13 Indonesia priced $1 billion of the 7¼% notes due April 20, 2015 at 99.127 to yield 7.375%. Citigroup, Deutsche Bank and UBS led the deal.

Earlier last week Indonesia submitted a request for proposals seeking an investment bank to manage the sale of a dollar-denominated global bond.

A trader who tracks Asian credits said Friday that Indonesia is also likely contemplating a possible new issue.

"I would imagine that nothing is set in stone at this point," the trader commented.

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