The Republic of Indonesia returned to the international debt markets for the first time in eight years yesterday Wednesday with arguably the most smoothly executed Asian sovereign transaction of quite some time. The deal sailed through the market from start to finish and while pricing was tight, it was not as ludicrously aggressive as the China and Korean sovereign bonds of 2003. Many now expect the whole Indonesian curve to be pulled in as a result of its success.
Under the lead of Deutsche Bank and JPMorgan an upsized $1 billion 10-year transaction was priced at 99.285% on a coupon of 6.75% to yield 6.85%. This equates to 277bp over Treasuries or...