Indonesia's dollar-denominated benchmark deal to include 2017 tranche

By Paul A. Harris

St. Louis, Feb. 28 - Indonesia's dollar-denominated benchmark fixed-rate sovereign bond offering (B2/B+), now in the market, will feature a 2017 tranche as well as a longer-dated tranche with a maturity that will be determined by investor demand, according to a market source.

Barclays Capital, JP Morgan and UBS Investment Bank are leading the Rule 144A and Regulation S offering.

The source added that Indonesia's total foreign bond market borrowing requirement for 2006 will be about $2 billion.

With respect to the proposed 2017 tranche, the source said that Indonesia's 7¼% notes maturing April 20, 2015 have recently traded in a 6.72% bid, 6.67% offered context, while the 7½% notes maturing Jan. 15, 2016 have recently traded in a 6.86% bid, 6.79% offered context.

Therefore according to the source it is reasonable to expect the proposed tranche maturing in March 2017 to yield 7% or slightly less.

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