Indonesia's unsteady start to bond deals

The Southeast Asian nation’s bond issuance sputters back to life but only for selected borrowers as they battle with the ever-evolving local regulatory environment.

Hopes of an Indonesian corporate debt revival have been running high in international bond markets since President Joko “Jokowi” Widodo assumed office in October but the window is not open for all.

Bank Indonesia’s new regulations aimed at limiting foreign exchange risk and reducing the leverage of local borrowers is partly to blame and could curb Indonesian high-yield issuers’ ability to access dollar bond markets, according to fixed income experts. So only high quality borrowers with visible cash flows and scalability will be able to access the market.

“With commodity prices firming up and oil prices having made a bit of a recovery, that all helps...

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