Credit Risk Mitigation Chance Reduced as Debt Switch Less Favorable

By Editorial Team 24/09/2019
Summary

The government on Friday (9/19) auctioned off Government Bonds (SUN) through debt switch. The bonds offered as destination bonds have a maturity date between 2025 and 2048, while source bonds eligible to be offered by SUN holders have a maturity between 2020 and 2024. The government won Rp 2.12 trillion from the nominal bids submitted amounting to Rp 4.76 trillion. Series offered as destination bonds include FR0081, FR0082, FR0080, FR0079, and FR0076.

The debt switch auction is the government’s strategy in lengthening duration to minimize refinancing risk. However, the proceeds from last weekend’s debt switch auction were not as much as debt switch auction held in March 2019, in which the government scooped Rp 8.44 trillion worth of bids and won Rp 4.74 trillion.

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