Overview

As the ongoing Corona Virus Disease 2019 (“COVID-19”) pandemic continues to disrupt business operations across many sectors of the economy all over the world, companies are seeking to maximize their alternatives in terms of being able to generate the revenue that they require in order to meet their financial requirements. In this context, over the past two years, a number of Indonesian businesses, including some of the country’s state-owned enterprises (Badan Usaha Milik Negara/BUMN) have begun to engage in offshore borrowing through the issuance of global bonds that are being marketed to foreign investors. One of the factors that are driving this issuance of global bonds is investor concern regarding the high volatility and increasingly tight liquidity conditions that are currently prevailing within the domestic market, leading to fears of competition between banks for liquidity. Consequently, high volatility in the stock market is spurring investors to start looking at fixed-income assets that are being offered in the form of bonds.[1]