Indonesian government conducted their sukuk auctions today and received incoming bids of Rp23.73 tn bids versus its target issuance of Rp6.00 tn or oversubscribed by 3.96x. However, DMO only awarded Rp6.31 tn bids for its 5mo, 2y, 4y, 7y and 1

Results: Government Sukuk Bond Auction

Overview

Indonesian government conducted their sukuk auctions today and received incoming bids of Rp23.73 tn bids versus its target issuance of Rp6.00 tn or oversubscribed by 3.96x. However, DMO only awarded Rp6.31 tn bids for its 5mo, 2y, 4y, 7y and 15y bonds which is in line with DMO’s indicative target. Incoming bids were mostly clustered on the 5mo SPN-S series. 5mo SPN-S was sold at a weighted average yield (WAY) of 5.32831%, 2y PBS013 was sold at 7.05057%, 4y PBS014 was sold at 7.44966%, 7y PBS011 was sold at 7.79917% while 15y PBS012 was sold at 8.24931%. No series bids were rejected during the auction. Bid-to-cover ratio during the auction came in at 1.45X – 7.25X.

Till the date of this report, Indonesian government has raised approx. Rp48.23 tn worth of debt through bond auction which represents 31.12% of the 1Q 17 target of Rp155.00 tn. Assuming that if Indonesia government issues Rp6.00 tn during every sukuk auction in 1Q 17 then the Government needs to issue Rp16.55 tn during every conventional auction (5 upcoming conventional auction in 1Q 17) to meet their target of Rp155.00 tn. On total, Indonesian government has raised approx. Rp95.5 tn worth of debt through domestic and global issuance which represent 13.9% of this year target of Rp684.8 tn.