HK Offers IDR1Trn Bond Amidst New NBFI’s Regulation

The Otoritas Jasa Keuangan (OJK) eventually has released a revised regulation regarding minimum government bond investment for NBFI. OJK released POJK No 36 /POJK 05/2016 stating the inclusion of state owned infrastructure bonds as an alternative investment instrument for NBFI in order to meet minimum investment in government bond as mandated by POJK No1/POJK. 05/2016. Currently, Hutama Karya (HK), a state owned construction, is offering the only infrastructure related bond in the primary market at the moment with the issuance target of IDR1Trn having 10y tenor. The bond is included as infrastructure bond as the entire net proceeds will be used for the construction of Trans Sumatra highway. The company guided the bond’s price at 30bps-75bps over the 10y benchmark yield FR0056. The book building period has been running since 16 November to 29 November.

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