Guarantee for Privately Placed Samurai Bonds Issued by the Government of Indonesia
Supporting Diversification of Indonesia’s Funding Sources and Invigoration of the Samurai Bond Market

• Region: Asia
• Others
• Guarantees

1. The Japan Bank for International Cooperation (JBIC; President & CEO: Hiroshi Watanabe)^*1 signed today a set of agreements to provide a guarantee for yen-denominated foreign bonds issued by the Government of Indonesia (GOI) in the Japanese bond market (Samurai bonds). ^*2 JBIC's guarantee will cover the principal and part of the interest of privately placed Samurai bonds totaling 60 billion yen.  Japanese participants in the issuance include: Nomura Securities Co., Ltd. and Daiwa Securities Capital Markets Co., Ltd. as joint lead arrangers; and the Bank of Tokyo-Mitsubishi UFJ Ltd. as a bond administrator.  
    
2. This is the second guarantee that JBIC has provided for Samurai bonds issued by GOI^*3. The first guarantee was extended in July 2009 under the Market Access Support Facility (MASF), which was implemented as part of JBIC's response to the global financial crisis, in support of the GOI as part of its anticipated measure to finance its budget deficit. Whereas it was the first guarantee provided under the MASF, the latest guarantee was extended under JBIC's newly established Guarantee and Acquisition toward Tokyo market Enhancement (GATE) facility. ^*4  As part of efforts to fulfill its mission: “maintaining and improving the international competitiveness of Japanese industries,” JBIC supports samurai bond issues by foreign entities in the Tokyo bond market with credit enhancement. JBIC's support will expand and diversify the range of investment opportunities available to Japanese investors, and help activate the Samurai bond market.  
    
3. The Indonesian economy has quickly returned to a sustainable growth path after the financial turmoil, and is forecasted to register a 6.0% real GDP growth in 2010.  Anticipating that the country's robust economic growth will encourage Japanese companies' trade and investment activities, JBIC is conducting financial policy dialogue (Dialogue) with the GOI to further strengthen mutual partnership with the GOI. The Dialogue is also aimed at supporting Japanese industries' smooth business operations in Indonesia by discussing solutions with the GOI in response to various issues. The provision of guarantee is also expected to support the GOI in diversifying its funding sources and contribute to the stable economic management of Indonesia, thereby further strengthening bilateral ties and improving the investment climate. 
    
4. JBIC will continue its support for Samurai bond issuance by foreign governments or government agencies in the Tokyo bond market by means of the GATE facility.

Note

1. *1 JBIC is the international wing of the Japan Finance Corporation (JFC; Governor: Shosaku Yasui). 
2. *2 Samurai bonds are yen-denominated bonds issued by a foreign government or company in the Tokyo bond market.
3. *3 See Press Release dated July 27, 2009.
4. *4 See Press Release dated April 15, 2010.