Theindonesiatoday.com - President SBY had signed Government Regulation on Regional Borrowings as guideline for regional administrations in the issuance of, among others, regional bonds.
President signed Govt Regulation No 30/2011 early this month to replace Government Regulation No 54/2005 about Regional Borrowing.
Regional administrations may raise borrowings to finance deficit of local budget, financing expenses, and or deficit in cash flow.
Regional government may also pass on the regional borrowing as on-loan, grant, and or equity participation to companies owned by local administration.
But regional administrations are still forbidden from directly raising offshore loans. (Article 4)
Source of regional borrowings could be from (1) central government, (2) other regional government, (3) banks, (4) Non-banks, (5) and public (through bonds issuance). (Article 10)
Regional Bonds can only be issued and listed in domestic capital market and denominated in rupiah, but will not be guaranteed by central government. (Article 39) (Theindonesiatoday.com)

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