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Tuesday, December 22, 2009

Retail sharia bond issuance worth at IDR3 trillion: Finance Minister to issue forward lease ijarah

as published in Bisnis Indonesia daily newspaper
Tuesday, 22/12/2009 00:00 WIB

Retail sharia bond issuance worth at IDR3 trillion
Finance Minister to issue forward lease ijarah

JAKARTA: The government set the indicative target of retail government sharia bonds (SBSN/sukuk) worth IDR3 trillion next year.

The total asset value for the SBSN underlying asset in the issuance is worth IDR20.3 trillion.

Debt Management Director General Rahmat Waluyanto said the asset for the issuance basis asset is the state property in the form of land and building owned by the ministry and institutions.

"The government could issue a maximum of a total asset of the basis asset which could be in the form of retail sharia bonds, corporate sharia bond, and global sharia bond," he said to press yesterday.

The three years tenured sharia bond will be sold by January and to be issued February 10 next year with minimum purchase of IDR5 million with unlimited top limit. The sharia bond instrument coupon will be set by January 21.

Some capital market players attending the meeting of retail SBSN sales commitment said the indicative target addressed by 18 sales agents stood at IDR4.3 trillion. The amount is said to have been garnered and agreed by Debt Management directorate general.

Sharia financing director Dahlan Siamat when asked about the targeted amount said he did not blame the different indicative issuance target of the two.

"Both are correct, and the IDR3 trillion is form the government. If from the seller, it is their combined agreement. The issuance could be upsized. Basically, the government is more conservative."

One of the new instrument to be issued is forward lease.

To materialize, the government should issue government regulation as the legal basis. "The forward lease ijarah issuance schedule is not fixed yet due to the ongoing draft of government regulation."

Principally, in the government regulation draft (RPP), it includes ministry or institutional projects and state enterprises funded by sharia bonds.

"The regulation on project financing has been agreed by the National Sharia Council. We have proposed for having the fatwa for immediate deliberation. It will be so-called forward lease ijarah," he said.

Rahmat said the government planned to issue government promissory notes (SBN) with gross value of IDR175.13 trillion next year. The issuance scheme is higher than the issuance this year of IDR144 trillion.

"The Finance Ministry is optimistic the issuance of SBN worth IDR175.13 trillion will be optimally absorbed by the market."

The government has either studied for BI recapitulation bond conversion. The bond is issued in relation with the central bank assistance to some banks with financial constraints in 1998 (SU-002/MK/ 1998, SU-004/MK/1998, and SU-007/MK/2007).

Meanwhile, the foreign possession position in the government bond (SUN) per December 15 stood at IDR108.25 trillion or rose from IDR107.73 trillion in previous day.

The overseas portion at SUN was 18.6 percent of the total government bond issuance worth IDR581.76 trillion. (Bisnis/21/agi)



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