The Government Will Auction 7 Series Sovereign Debt Instruments with an Indicative Target of Rp. 37.5 Trillion

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The Government of the Republic of Indonesia plans to hold an auction of Sovereign Debt Instruments (SUN) on Wednesday, February 2, 2022. The government has set an indicative target of Rp. 25 trillion – Rp. 37.5 trillion of the seven series offered in this auction.

Quoted from the website of the Directorate General of Financing and Risk Management (DJPPR) of the Ministry of Finance, the seven series of SUN to be auctioned are the SPN (State Treasury) and FR (Fixed Rate) series. This auction was conducted as an effort to fulfill part of the financing target of the 2022 State Budget.

The seven series of SUN that will be auctioned are:

  1. SPN03220505 which matures on May 5, 2022, with a discount
  2. SPN12230203 which matures on February 3, 2023, with a discount
  3. FR0090 which matures on April 15, 2027, with a 5,125% reward.
  4. FR0091 which will mature on April 15, 2032, with 6.375% compensation.
  5. FR0093 due on July 15, 2037, with 6.375% compensation
  6. FR0092 which matures on April 15, 2042. with compensation of 7.125%.
  7. FR0089 which matures on August 15, 2051, with 6.875% compensation

The Ministry of Finance’s DJPPR also noted that non-competitive purchase allocations for the SPN series were a maximum of 50 percent of those won, while for other SUN series a maximum of 30 percent.

The main dealers in the auction included Citibank NA, Deutsche Bank AG, PT Bank HSBC Indonesia, PT Bank Central Asia, Tbk., PT Bank Danamon Indonesia, Tbk., PT Bank Maybank Indonesia, Tbk., PT Bank Mandiri (Persero), Tbk., and PT Bank Negara Indonesia (Persero), Tbk.

In addition to the main dealer, the participants in the SUN auction also consist of the Deposit Insurance Corporation and Bank Indonesia (BI).

This auction will open on Wednesday, February 2, 2022, at 09.00 WIB and close at 11.00 WIB. While the settlement date falls on Friday, February 4, 2022.

Later, the sale of the SUN will be carried out using an auction system organized by Bank Indonesia.

This auction is an open auction and uses the multiple-price method. The SUN to be auctioned has a nominal value per unit of IDR 1 million.

Furthermore, auction winners who submit competitive bids will pay according to the submitted yield. Auction winners who submit non-competitive bids will pay according to the weighted average yield of the winning competitive bids.

The government has the right to sell the seven series of SUN, which is greater or less than the specified indicative amount, while the SUN to be auctioned has a nominal value per unit of Rp. 1 million.