Indonesia Raises 10 Billion Yuan in Second Panda Bond Sale to Fund Budget Deficit

JAKARTA, Investortrust.id — The Indonesian government has concluded its second sovereign bond sale in China's interbank debt market, securing 10 billion yuan (approximately Rp 27.20 trillion) across three tranches to fund the 2026 state budget (APBN) and broaden its offshore investor base.

The debt issuance capitalizes on benign funding conditions and deep liquidity within mainland China’s onshore debt universe, taking advantage of a favorable exchange rate benchmark where one yuan was valued at roughly Rp 2,718. The operation marks Indonesia’s second tapping of the onshore renminbi market following its inaugural Panda bond debut earlier in July.

Three Tranches Draw 17.26 Billion Yuan in Bids

The transaction drew 17.26 billion yuan in aggregate order books, generating a bid-to-cover ratio of 1.725 times across three maturity tenors.

Director General of Financing and Risk Management (DJPPR) at the Ministry of Finance, Suminto, noted that strong local participation enabled the government to lock in competitive pricing. "By optimizing the conducive conditions in China's domestic bond market, the government executed its second Panda bond issuance on Nov. 10, 2026," Suminto said on Wednesday. "The strong investor interest allowed the government to secure efficient funding costs through competitive yields."

The sale was structured into three distinct tranches: the three-year series RICNY1129, which raised 5.70 billion yuan at an annual yield of 1.96%; the five-year series RICNY1131, which secured 3.70 billion yuan yielding 2.50%; and the seven-year series RICNY1133, raising 600 million yuan also priced at 2.50%.

The sovereign paper was assigned an AAA domestic credit rating with a stable outlook by China Lianhe Credit Rating Co., Ltd. Syndicate managers included China International Capital Corporation Limited acting as lead underwriter and lead bookrunner, supported by major state-owned and international institutions including Bank of China, Agricultural Bank of China, China Construction Bank, ICBC, CITIC Securities, The Export-Import Bank of China, Deutsche Bank, and Standard Chartered Bank.

Deepening Local Currency Cooperation

The transaction deepens Indonesia's funding diversification strategy into the renminbi bond universe, advancing bilateral Local Currency Transaction (LCT) frameworks between Jakarta and Beijing to reduce reliance on the US dollar in trade settlement and capital financing.

The transaction follows Indonesia's inaugural Panda bond issuance on July 23, 2026, which raised 7 billion yuan (around $1.03 billion). The maiden sale was oversubscribed by 2.4 times, attracting 17 billion yuan in total orders across three-year and five-year notes with coupons of 1.90% and 2.19%, respectively.

Finance ministry officials reaffirmed that the continued investor demand across both operations demonstrates sustained foreign institutional confidence in Indonesia's underlying macroeconomic fundamentals, disciplined fiscal management, and active investor engagement in the world's second-largest economy.