The Government Releases Seven New Debt Instruments Maximum IDR 49.5 Trillion

Illustration. (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) intends to release seven Government Securities (SUN) at once to fill the deficit in the State Revenue and Expenditure Budget (APBN) for the 2021 financial year which reached more than IDR 1.000 trillion.

"The government will conduct an auction of Government Securities (SUN) in Rupiah currency to fulfill part of the financing target in the 2021 State Budget", the Ministry of Finance's Directorate General of Financing and Risk Management said, quoted on Monday, July 5.

The auction is carried out based on the Minister of Finance Regulation Number 168/PMK.08/2019 concerning Auction of Government Securities in the Domestic Primary Market (PMK No. 168/PMK.08/2019).

In addition, this strategic step is also supported by the Minister of Finance Regulation Number 38/PMK.02/2020 concerning the Implementation of State Financial Policy for Handling the 2019 Corona Virus Disease (COVID-19) Pandemic.

It is stated that the released SUN will begin to be auctioned on Tuesday, July 6, 2021, opening at 09.00 a.m. and closing at 11.00 a.m. Then, the Settlement will be held on Thursday, July 8, 2021.

Meanwhile, the indicative target is IDR 33 trillion with a maximum target of IDR 49.5 trillion.

Meanwhile, the seven series of SUN to be released are as follows:

1. SPN12211007 (reopening): Due October 7, 2021, discounted interest rate

2. SPN12220707 (new issuance): Due July 7, 2022, discounted interest rate

3. FR0090 (new issuance): Due April 15, 2027, fixed rate and will be set on July 6, 2021

4. FR0091 (new issuance): Due April 15, 2032, fixed rate and will be set on July 6, 2021

5. FR0088 (reopening): Due June 15, 2036, interest rate 6.25000 percent

6. FR0092 (new issuance): Due June 15, 2042, interest rate Fixed rate and will be set on July 6, 2021

7. FR0089 (new reopening): Due August 15, 2051, interest rate 6.87500 percent

The sale of the SUN will be carried out using an auction system organized by Bank Indonesia. The auction is an open auction, using the multiple price method. Auction winners who submit competitive bids will pay according to the submitted yield.

The government has the right to sell the seven series of SUN for more or less than the specified indicative amount. The SUN to be auctioned has a nominal value per unit of IDR 1 million.

"In principle, all parties, both individual and institutional investors, can submit bids in the auction", the release concluded.