1. State Agency Bonds
| Issuer | State-owned companies |
| Tenor | Tenors of state agency bonds range between five and eight years. |
| Currency | Indonesian rupiah |
| Interest Payment | Issues are either fixed- or floating-rate with interest paid semiannually for fixed rate and quarterly for floating rate. Day count applied to interest payment is 30/360. |
| Average Issue Size | IDR 100billion – 1 trillion |
| Minimum Amount of Bid | IDR1 million |
| Method of Sale in the Primary Market | Bookbuilding and underwritten |
| Who May Apply | Application is open to resident and nonresident individuals and corporate investors through underwriters and selling agents. However, foreign investors must first seek the approval of Bank Indonesia or BAPEPAM before they can participate in the market. |
| Redemption | Issues are typically redeemable at par upon maturity. However, some bonds are convertible, while others are offered with a callability option. |
| Taxation | A 20% withholding tax is levied on all interest income earned by foreign investors. Capital gains on bonds are also subject to a 20% tax. However, this may vary depending on existing tax treaties between Indonesia and the investor’s country of origin. Mutual funds and pension funds are tax exempt. |
| Secondary Market Trading | Bonds are traded over-the-counter (OTC). The Surabaya Stock Exchange facilitates bond transactions through its Over-the-Counter – Fixed Income Securities (OTC-FIS) electronic trading facility. |
2. Private Corporate Bonds
| Issuer | Domestic private companies |
| Tenor | Tenors of corporate bonds range between three and eight years, although five years is the typical maturity. |
| Currency | Indonesian rupiah |
| Interest Payment | Issues are either fixed- or floating-rate with interest paid semiannually for fixed rate and quarterly for floating rate. Day count applied to interest payment is 30/360. |
| Average Issue Size | Average issue size of corporate bonds is between IDR100 billion and IDR1 trillion |
| Minimum Amount of Bid | IDR1 million |
| Method of Sale in the Primary Market | Bookbuilding and underwritten |
| Who May Apply | Applications are open to resident and nonresident individuals and corporate investors through underwriters and selling agents. However, foreign investors must first seek the approval of Bank Indonesia or BAPEPAM before they can participate in the market. |
| Redemption | Issues are typically redeemable at par upon maturity. However, some bonds are convertible, while others are offered with a callability option. |
| Taxation | A 20% withholding tax is levied on all interest income earned by foreign investors. Capital gains on bonds are also subject to a 20% tax. However, this may vary depending on existing tax treaties between Indonesia and the investor’s country of origin. Mutual funds and pension funds are tax exempt. |
| Secondary Market Trading | Bonds are traded over-the-counter (OTC). The Surabaya Stock Exchange facilitates bond transactions through its Over-the-Counter – Fixed Income Securities (OTC-FIS) electronic trading facility. |
A. State Agency Bond Issuers
State-owned companies are the primary issuers of quasi-government issues. Leading issuers of state agency bonds are PT PLN, the state electricity board of Indonesia, and Jasa Marga, Indonesia’s state toll-road operator.
B. Private Corporate Bond Issuers
Most bonds issued by private corporations are listed in the Indonesia Stock Exchange (IDX).
Majority of secondary market trading is done via Fixed Income Trading (FIT) bond trading mechanism.
A comprehensive list of outstanding corporate bonds listed on the IDX and a market summary of bond trading can be found at the links below:
List of Outstanding Corporate Bonds Listed on the Indonesia Stock Exchange
Market Summary