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Indonesia to sell first Samurai bonds without JBIC support

[HONG KONG] The Republic of Indonesia has begun marketing multi-tranche Samurais that will partially comprise bonds without guarantees from the Japan Bank for International Cooperation.

The fixed-rate tranches of three and five years will be standalone notes, marking the first time Indonesia will sell bonds to Japanese investors without the support of JBIC, a public financial institution that promotes economic cooperation between Japan and other countries.

Those bonds are being marketed at 85bp-90bp and 108bp-115bp over yen offer-side swaps, respectively. 

The notes are expected to score ratings of Baa3 from Moody's and BBB- from Fitch, both on par with the sovereign.

The 10-year fixed bonds carry a guarantee from the JBIC, which is rated higher at A1 (Moody's) and /AA- (S&P). Those bonds are being marketed around 126bp-127bp.

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Indonesia follows numerous sovereigns, such as Mexico, which have graduated from JBIC guarantees, thanks to repeat issues that have helped them become more familiar to Japanese investors.

The notes are expected to price next Tuesday.

Mizuho, Nomura and SMBC Nikko are joint lead managers.


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