Indonesia issues record RMB 10bn panda bonds, including first 7-year tranche
Indonesia issued 10 billion yuan in sovereign panda bonds on China's interbank market, a record size. The bonds feature three maturities: 5.7 billion yuan at 1.96% for 3 years, 3.7 billion yuan at 2.15% for 5 years, and 600 million yuan at 2.5% for 7 years, marking the first 7-year sovereign panda b
Indonesia has issued 10 billion yuan (about US$1.4 billion) in sovereign panda bonds on China's interbank bond market, setting a new record for the size of such issuance by a sovereign issuer, according to lead underwriter and bookrunner China Finance (CICC).
The bonds are offered in three maturities: 5.7 billion yuan in three-year notes with a coupon rate of 1.96 per cent; 3.7 billion yuan in five-year notes at 2.15 per cent; and 600 million yuan in seven-year notes at 2.5 per cent. CICC noted that previous sovereign panda bonds were mainly three- or five-year instruments, and this is the first time a seven-year tranche has been issued.
CICC said the introduction of the seven-year maturity helps fill a gap in longer-term sovereign panda bonds, improving the yield curve in the market. It also allows the issuer to lock in medium- to long-term financing costs, obtain stable renminbi funding, and optimise the maturity structure of its external debt.
According to foreign wire reports, Indonesia previously issued 7 billion yuan in panda bonds on China's interbank market in late July this year, comprising three- and five-year notes with coupon rates of 1.9 per cent and 2.19 per cent respectively.