Indonesia Raises CNY10 Billion in Second Panda Bond Sale as Orders Reach CNY17.26 Billion

China investors order more than Indonesia sells

Indonesia priced CNY10 billion of government bonds in China's domestic market on November 10, 2026, attracting peak orders of CNY17.26 billion as it returned to yuan borrowing for the second time. The sale, equivalent to about US$1.5 billion, will help finance the 2026 state budget, with settlement scheduled for November 17.

The Ministry of Finance's Directorate General of Budget Financing and Risk Management, known as DJPPR, said the government sold three series maturing in three, five and seven years. Their annual coupons are 1.96%, 2.15% and 2.50%, respectively. All three were priced at their face value, making their yields at issuance equal to those coupon rates.

The transaction follows Indonesia's first Panda Bond sale on July 23, when it raised CNY7 billion. Together, the two sales bring its borrowing through these transactions to CNY17 billion in 2026. November's sale was CNY3 billion, or about 42.9%, larger than July's.

Panda Bonds are bonds denominated in yuan and sold in mainland China by issuers from outside China. For Indonesia, they open another channel for borrowing beyond its domestic market and international borrowing in currencies such as the US dollar and euro.

The government presented the sale as a way to widen its investor base and obtain competitive funding costs. The immediate attraction is interest below 3% across all three maturities. The longer obligation is to pay interest and repay principal in yuan, making future exchange rates part of the eventual cost to Indonesia's budget.

What Indonesia sold and when repayment falls due

The largest portion of the sale was the shortest maturity. Indonesia raised CNY5.7 billion through the series due in 2029, accounting for 57% of the total. Another 37% matures in 2031, while the remaining 6% falls due in 2033.

• RICNY1129: CNY5.7 billion, a three year maturity, an annual coupon of 1.96%, and repayment on November 17, 2029.
• RICNY1131: CNY3.7 billion, a five year maturity, an annual coupon of 2.15%, and repayment on November 17, 2031.
• RICNY1133: CNY600 million, a seven year maturity, an annual coupon of 2.50%, and repayment on November 17, 2033.

A coupon is the interest rate applied to a bond's face value. Based on the amounts issued and their coupons, the three series together carry CNY206.17 million in annual coupon interest while all remain outstanding. That calculation excludes issuance expenses and any costs of converting currencies or protecting against exchange rate movements.

The amounts also show how Indonesia balanced price and repayment timing. Most of the money comes from the series carrying the lowest rate, but that means most of the principal from this sale must be repaid in 2029. The seven year series keeps a smaller portion outstanding until 2033 at a higher annual rate.

Orders exceeded the sale by CNY7.26 billion

DJPPR's November 11 statement put the peak order book at CNY17.26 billion, compared with the CNY10 billion ultimately issued. The difference was CNY7.26 billion, meaning peak demand exceeded the sale amount by 72.6%.

The resulting bid to cover ratio was 1.726 times. In simple terms, investors sought about CNY1.73 of bonds for every CNY1 the government sold. The order book measures investor demand during the sale; the amount raised for the budget is the CNY10 billion issued.

Suminto, the Finance Ministry's director general responsible for financing and risk management, said the government used favorable conditions in China's domestic bond market. He attributed the response to confidence in Indonesia's economic fundamentals, prudent and credible fiscal policy, and effective communication with investors in China.

The ministry said strong interest allowed it to set competitive yields and obtain efficient funding costs. No breakdown of orders among the three maturities was given, so the figures show demand for the transaction as a whole.

Why the final amount was below the earlier target

Before final pricing, the fundraising target was described as CNY12 billion. DJPPR's completed transaction figures put the actual sale at CNY10 billion, CNY2 billion below that target. The government did not explain why it settled on the smaller amount.

During bookbuilding, when banks collect investor orders and help determine the final price, the indicative yield ranges were 1.55% to 2.15% for three years, 1.71% to 2.31% for five years, and 1.95% to 2.65% for seven years. Each final yield fell within its corresponding range.

The difference between the earlier target and the final sale matters for the budget: Indonesia took on CNY10 billion of principal through this transaction. Its peak orders were higher than both the final amount and the earlier target.

The main dates place the sale within a broader sequence of government borrowing:

• July 23, 2026: Indonesia issued its first Panda Bonds, raising CNY7 billion through maturities of three and five years.
• November 6, 2026: The government raised US$3 billion through global sukuk, Islamic financing certificates, in three series.
• November 10, 2026: Bookbuilding and pricing took place for the second Panda Bond transaction.
• November 11, 2026: DJPPR's statement detailed the CNY10 billion sale and investor demand.
• November 17, 2026: Settlement was scheduled, when payment and delivery of the bonds would be completed.

How the interest rates compare with July

July's first Panda Bond sale offered a yield of 1.90% on the three year RICNY0729 series and 2.19% on the five year RICNY0731 series. November's corresponding rates moved in different directions: the three year yield rose to 1.96%, while the five year yield fell to 2.15%.

The three year increase was 0.06 percentage points, or six basis points. The five year decrease was 0.04 percentage points, or four basis points. A basis point is one hundredth of a percentage point, a unit commonly used to describe small interest rate changes.

November also added a seven year maturity at 2.50%, extending the range of repayment dates beyond those offered in July. Indonesia therefore raised more money in its second transaction while giving investors an additional maturity to choose from.

Suminto explained that the bonds were priced at 100% of face value, which is why the initial yield matched the coupon:

Karena pricingnya di 100%, sehingga yieldnya sama dengan kupon,

For a buyer paying face value, the stated annual coupon matches the initial yield under the bond's payment terms. A different purchase price would change the buyer's yield even if the coupon stayed the same.

Lower yuan yields come with a currency tradeoff

Indonesia's yuan yields were below the rates cited for several other foreign currency borrowings. The five year US dollar government bond RI0531 carried a yield of 5.050%, compared with 2.15% for the new five year Panda Bond. The seven year euro SDB Bond RIEUR0533 yielded 4.558%, compared with 2.50% for the yuan series of the same maturity.

The November 6 global sukuk sale also carried higher stated yields: 5.45% for three years, 5.85% for five years and 6.25% for ten years. The three and five year yuan yields were respectively 3.49 and 3.70 percentage points below those sukuk yields.

Currency movements and the cost of any protection against them help determine how much foreign borrowing ultimately costs in rupiah. A lower yuan coupon reduces the stated interest bill in that currency, while a stronger yuan against the rupiah increases the rupiah needed to make payments.

David Sumual, chief economist at Bank Central Asia, said yuan borrowing could widen Indonesia's funding options and reduce its exposure to US dollar volatility. He argued that the yuan's movement against the dollar had a relatively weak correlation compared with currencies such as the euro and yen.

Sumual also warned about the yuan's recent strengthening against the dollar. For Indonesia's budget, the exchange rate between the yuan and rupiah determines the rupiah value of each yuan payment. Borrowing in another currency spreads exposure across currencies while creating an obligation in the new one.

What the AAA rating means for this transaction

China Lianhe Credit Rating Co., Ltd. assigned the Panda Bonds an AAA rating with a stable outlook. AAA is the highest rating on the agency's scale. A credit rating expresses the agency's assessment of repayment risk, while the outlook describes its view of the likely direction of that rating.

Indonesia's cited international sovereign ratings were Baa2 from Moody's and BBB from both S&P and Fitch. Those assessments come from different agencies using their own rating frameworks; the Lianhe rating applies to this transaction under its assessment.

The AAA rating formed part of the transaction's credit profile alongside its pricing, maturity choices and investor demand. Indonesia's obligations remain the coupon payments and repayment amounts set out for each series.

A growing market and a wider funding base

Sumual estimated that Indonesia accounted for about 1.3% of outstanding Panda Bonds in the market. He also cited growth of 73.6% in global Panda Bond issuance compared with a year earlier through October 2026, arguing that Indonesia had room to make greater use of this funding channel.

Those figures describe different parts of the market. Outstanding bonds are borrowing that has been issued and remains unpaid. Issuance measures new bonds sold during a particular period. Together, the figures point to a market attracting more new borrowing while Indonesia retains a relatively small share of its existing stock.

The government said continued participation in China's domestic bond market was intended to broaden the investor base for Indonesian government securities and support financial cooperation between Indonesia and China. November's return, less than four months after the first sale, gives that strategy a second completed pricing transaction.

The proceeds are designated for the financing needs of the 2026 state budget, including its deficit. This makes the sale part of general government financing rather than borrowing assigned to a named infrastructure project.

The banks arranging the sale and its currency value

China International Capital Corporation Limited served as lead underwriter and lead bookrunner. These roles involve organizing the sale, gathering investor orders and helping the issuer determine pricing and allocations.

Nine institutions acted as joint lead underwriters and joint bookrunners: Agricultural Bank of China Limited, Bank of China Limited, China Construction Bank Corporation, China Securities Co., Ltd., CITIC Securities Co., Ltd., Guotai Haitong Securities Co., Ltd., Huatai United Securities Co., Ltd., Industrial and Commercial Bank of China Limited, and The Export-Import Bank of China.

Deutsche Bank (China) Co., Ltd., Shanghai Pudong Development Bank Co., Ltd., and Standard Chartered Bank (China) Limited were the other underwriters. The group combined major Chinese banks and securities firms with the Chinese operations of international banks.

The transaction's fixed borrowing amount is CNY10 billion. At the stated conversion rate of US$1 to CNY6.6703, that is approximately US$1.5 billion. Rupiah estimates range from about Rp25 trillion to roughly Rp27 trillion depending on the conversion used. At Rp2,715 per yuan, the sale equals Rp27.15 trillion and peak orders equal about Rp46.87 trillion.

Indonesia's budget receives the benefit of another financing channel now, while the payment schedule stretches to November 2033. The key figures to follow are the yuan obligations themselves, the repayment dates and the rupiah cost of meeting them.

Key Points

• Indonesia priced CNY10 billion of Panda Bonds on November 10, 2026, with settlement scheduled for November 17.
• Peak orders reached CNY17.26 billion, giving a bid to cover ratio of 1.726 times.
• The three series carry annual coupons of 1.96%, 2.15% and 2.50%, with maturities in 2029, 2031 and 2033.
• The final sale was CNY2 billion below the earlier CNY12 billion target.
• July and November's transactions together raised CNY17 billion for Indonesia in 2026.
• China Lianhe assigned the bonds an AAA rating with a stable outlook.
• The proceeds support 2026 budget financing, while future currency movements will affect repayment costs in rupiah.