Snapshot BII Report - 08 September 2015

Results: Government Sukuk Bond Auction

Overview

Indonesian government conducted their sukuk auctions today and received incoming bids of Rp4.85 tn bids versus its target issuance of Rp2.50 tn or oversubscribed by 1.9x. However, DMO only awarded Rp2.50 tn bids for its 5mo, 9mo, 2.5y and 5y bonds. Incoming bids were mostly clustered on the 5mo and 2.5y series. 5mo SPN-S was sold at a weighted average yield (WAY) of 6.81351%, 9mo PBS008 at 7.51250%, 2.5y PBS009 at 8.31906% while 5y PBS006 was sold at 8.90979%. No bids were rejected during the auction. Bid-to-cover ratio during the auction came in at 1.26X – 3.40X.

Incoming bids during the auction came in below our expectation and was lower by 23.2% compared to demand on Aug 25^th sukuk auction. Some of the auctioned series weighted average yield came in line with our expectation and the remaining came slightly above our call.

Till the date of this report, Indonesian government has raised approx. Rp63.52 tn worth of debt through bond auction which represents 100.8% of the 3Q 15 target of Rp63.00 tn. On total, Indonesian government has raised approx. Rp390.3 tn worth of debt through domestic and global issuance which represent 86.3% of this year target of Rp452.2 tn.