Fixed Income

Bonds

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Details as follows:

Product Details

Indonesia Government Bond Structure

  
IssuerGovernment of Republik Indonesia
Offering Price100% from principal value
Nominal for each UnitIDR 1.000.000,00 (one million Rupiah)
Coupon payment dateDepend on the Bonds series, Coupon payment will be done periodcally on predetermined dates. In terms of coupon payment date fall on holiday, coupon payment will be process on next working day where interbank clearing held in Jakarta
Next coupon nominalThe coupon payment nominal is depend on the bonds series. Every series might have different coupon rates. For Rupiah, coupon payment will be rounded in full Rupiah, with rounding terms 50 cent and below will be rounded down to zero and above 50 cents will be rounded up to one.
Rights of coupon and principalParty that registered in ”Daftar Pemegang Obligasi” in Bank Indonesia and registered in ” Pemilik Penerima Manfaat” in custodian on 2 (two) working days before coupon payment date and/or bond principal has the right for coupon and/or principal of bond
Issuer callGovernment has the right to buy bond at market price.Called bond automatically considered as paid.Bank Indonesia will announce called bond amount on first working daye the following week.
Bond on maturityBond on maturity will be paid at 100% (one hundred per cent) from principal value. In terms of maturity date fall on holiday, bond payment will be process on next working day where interbank clearing held in Jakarta
  
Guaranteed by Government of Republic of IndonesiaIndonesia Government bonds are guaranteed by the government of Republic of Indonesia for coupon payment and payment on maturity by act
Fixed incomeCustomer receive fixed income from bond in form of coupon that determined based on each series invested
Capital gain potentialCustomer potentially will get capital gain if Customer redeem their bond at price that is higher than its subscription price
Currency choicesCustomer can choose bonds with denomination IDR or USD
  
Credit risk
  • Customer will subject to the risk of issuer (Republic of Indonesia)
  • Bonds are not bank deposits or tabungan that are guaranteed by PT Bank DBS Indonesia, and not part of deposit insurance scheme covered by Lembaga Penjaminan Simpanan (LPS)
Interest rate risk
  • Investing in Bonds generally influenced by prevailing interest rate. In general, if Interest rate is decreasing, price of bond to increase, likewise if the interest rate is increasing ,the price of bonds tend to decrease
  • Sensitivity of the bond will subject to the tenor of each bond. The longer the tenor, the more fluctuate it is in association to the interest rate movement
Risk of economic and political changesChange in or worsening economic and political condition domestically or globally or any regulation changes may affect Income earning projection which in turns also affect the performance of debt issuer
Market riskIn Bond investing, customer may face the risk of fallen price of bond in secondary market. Investment principal can be reduced or loss if bonds is sold when the price falls
Risk of early called by issuerIn the case of early Called by bond issuer, customer may face the risk of lower price level compare to subscription date
Liquidity riskIn abnormal market condition, Bond Purchase or sell instructed by customer may not be performed due to unavailability of supply and demand in secondary market
Related Party RiskIn bond investing, bond holders will also subject to the default risk of related party in bonds transaction mechanism
Risk of change in regulationChanges in regulations, especially related to taxation of bonds may affect the effective investment return received by the customer

 

FOREIGN CURRENCY BOND COUPON CALCULATION

Notes: All calculations Dates viewed not considered national holiday. All numbers below neither indicates past nor future performances of bond

Assumptions:

  • Nominal USD 20.000,00
  • Transaction is INDON witch coupon rate 5.25%, coupon paid semi-annually paid every 17 January dan 15 July each year
  • Subscription: 14 April 2014 with settlement date 17 April 2014

Bond with foreign currency denomination calculated coupon with 30/360 method.

Calculations are:

MonthDayRemarks
January131 day after last coupon payment untul end of month ignoring 31
February30Rounding 30 days for one month
March30Rounding 30 days for one month
April17Number of days from beginning of April to settlement date
Total90Accrued days for accrued interest calculation

On subscription, accrued interest calculated as follows:

Coupon = principal x Coupon rate x (Accrued days/360 days)

Coupon = USD 20,000 x 5.25% x (90 days/360 days)= USD 262,50

IDR CURRENCY BOND COUPON CALCULATION

 

Notes: All calculations Dates viewed not considered national holiday.
All numbers below neither indicates past nor future performances of bond.

Assumptions:

  • Principal IDR 100.000.000,00
  • Transaction for FR0058 with coupon rate 8.25% paid semi-annually every 15 June dan 15 December each year
  • Subscription: on 17 March 2014 at 95.00%, with accrued days 94 days and actual days 182 days
  • Redemption: on 11 August 2014, with accrued day is 59 days and actual day is 183 days
  • Profit formula is: (redemption price – subscription price) x principal

Accrued interest on subscription (17 March 2014 with settlement date 19 March 2014)
On subscription, accrued interest will be calculated as follows:

Coupon = Principal x Coupon rate x [Accrued days/(Actual days x number of coupon payment)]

Coupon = IDR 1,000,000 x 8.25% x [94/(182 x 2)]= IDR 21.304,94 rounded IDR 21.305

Accrued interest:

(IDR 100.000.000/IDR 1.000.000) X IDR 21.305 = IDR 2.130.500

On coupon payment date (15 June and 15 December each year)

Coupon = IDR 1,000,000 x 8.25% x [182/(182 x 2)]= IDR 41.250,00

Gross coupon:

(IDR 100.000.000/IDR 1.000.000) X IDR 41.250 = IDR 4.125.000

SCENARIO 1: REDEMPTION PRICE > SUBSCRIPTION PRICE

Customer redeem at 97.00%, gross return from investment are:
(97.00% - 95.00%) x IDR 100.000.000,00 = IDR 2.000.000,00
Gross return from investment are IDR 2.000.000,00 added by accrued interest

SCENARIO 2: REDEMPTION PRICE = SUBSCRIPTION PRICE

Customer redeem at 95.00%, gross return from investment are:
(95.00% - 95.00%) x IDR 100.000.000,00 = IDR 0
Return for customer is the accrued interest

SCENARIO 3: REDEMPTION PRICE < SUBSCRIPTION PRICE

Customer redeem at 94.00%, loss from investment are:
(94.00% - 95.00%) x IDR 100.000.000,00 = (IDR 1.000.000,00)
If accrued interest is IDR 1.329.900, Customer still get gross return from differences of loss and accrued interest (IDR 1.329.900 – IDR 1.000.000 = IDR 329.900)

  
Paying agentBank Indonesia
Paying agent responsibilityPaying agent automatically debit government account in Bank Indonesia for coupon and principal on maturity.
At the same day paying agent paid coupon and principal to recorded party at ” Daftar Pemegang Obligasi”.
Custodian recorded at ”Daftar Pemegang Obligasi” at Bank Indonesia has the responsibility to pay coupon and principal of bond at the same day to ” Pemilik Penerima Manfaat” that recorded in Custodian.
TaxationTaxation act applied
Restriction in investment and ownershipN/A
Applied LawIndonesian law
Settlement date2 (two) working days after transaction date for IDR denomination, and 3 (three) working days after transaction date for foreign currency denomination referring to holiday in Indonesia and origin country of particular currency
FeeThe fee of Bonds transaction is included in the Bonds price
All Bonds payment from to customer, are subject to tax law

For more information, click on the 'Contact Me' button below or contact DBSI Customer Centre at 1 500 327 / 69 327 (via mobile phone) or contact your Treasures Relationship Manager.

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PT Bank DBS Indonesia is registered and monitored by Financial Services Authority (OJK – Otoritas Jasa Keuangan).

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