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Waskita’s Missed Bond Payment Puts Indonesia Guarantee to Test

Source: Bloomberg

Sovereign Debt & RatingsCredit & Bond MarketsBanking & LiquidityFiscal Policy & Budget

Indonesian state-owned construction company PT Waskita Karya failed to repay 722 billion rupiah ($40 million) in bonds due Thursday. The default triggers a claim on an Indonesian government guarantee program, testing a pandemic-era backstop and raising concerns over state-owned enterprise credit risk and potential fiscal exposure.

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