#Indonesia on the radar as #Investor’s flee #Eurozone
With the turmoil and uncertainty associated with the #Eurozone, long term bond investors are seeking alternative places to invest their dollars. It seems one star performer has particularly caught their eye. Earlier this week Indonesia sold US$1.75 billion dollar denominated 30 year bonds which offered a 5.25% coupon to yield 5.375% – more than 200 base points higher than that for the US 30 year bond. #HSBC, #JP Morgan Chase and #Standard Chartered arranged the bond sale.
The offering was the first for Indonesia since it had joined the ‘investment grade’ club, when Fitch Ratings had upgraded Indonesia’s rankings to BBB- on Dec 15 2011. At the same time the Rating agency lowered France’s outlook and placed Spain and Italy on review for a downgrade.
The Indonesian Finance Ministry stated it received US$3.6 billion in orders – more than double the amount on offer. 51% of which came from the US, 12% from Europe and 37% from Asia. With some predicting Indonesia’s GDP to increase to 6.2% in 2012 and with a growing middle class and the 4th most populous country in the world (approx 240 million) it’s no wonder Indonesia is on investor’s radar.