ASEAN KEY DESTINATIONS
Indonesia: No postponement for global bond issue
Indonesia's planning minister said the government would go ahead with a global bond issue, reported Reuters.
Rating agencies estimate the issuance could raise as much as $4 billion to help fund the budget deficit.
The government last month announced a 71.3 trillion rupiah ($6 billion) fiscal stimulus package to boost growth and create jobs, countering the effects of the global economic slowdown in an election year.
Indonesia, which started marketing the bond issue on Feb. 2, has secured some $5-$6 billion in standby loans from various multilateral agencies.
That prompted speculation in the international capital markets that the global bond issue could be postponed.
But Planning Minister Paskah Suzetta reiterated on Friday that Indonesia would tap the international bond market for funding.
"We must go ahead," he told reporters when asked whether the government will proceed with the debt sale.
"The standby loans are only for emergency purposes."
Rating agencies Standard & Poor's and Moody's rated the planned bond issue BB-minus and Ba3, respectively, or three notches below investment grade, while Fitch rated the planned bond issue two notches below investment grade.
Finance Minister Sri Mulyani Indrawati said on Feb. 2 that Indonesia has secured up to $6 billion in standby loans from official creditors, which she said would be used if raising debt in the market proved too costly.
Indonesia, which is Southeast Asia's biggest economy, has forecast a 2009 budget deficit of 2.5 percent of GDP, compared with its earlier target of 1 percent.
The government has it would use bonds, loans from official creditors, unspent budget funds from previous years and other sources of financing to fund the deficit.