2017 Bond Issuance Reaches Rp 635 Trillion

PT Kereta Api Indonesia (KAI) plans to issue its inaugural bonds with a total emission value of Rp 2 trillion. The majority of these funds will be used for the construction of the Soekarno-Hatta Airport Rail Link. Issuing bonds is a more efficient option compared to seeking bank loans. Bond emissions in 2017 have increased by more than 20 percent compared to the previous year.

Based on data from the Financial Services Authority (OJK)'s Capital Market Statistics, total bond emissions up to November 10, 2017, reached Rp 634.66 trillion. This figure is up 20.1 percent from the total emissions in 2016, which reached only Rp 528.42 trillion. This includes Rp 491.35 trillion in government bonds and Sukuk, Rp 137.15 trillion in corporate bonds, and Rp 6.16 trillion in Sukuk bonds. Both government and corporate bond emissions saw increases in 2017.

Indonesia's achievement of investment-grade status makes the domestic debt market increasingly attractive, as risk perception has decreased. This investment-grade status will lead to lower yields on Indonesian bonds, making them attractive for both government and corporate funding. However, they remain attractive to investors because, despite the decrease, the yield remains among the highest compared to other countries.