Harry Suhartono

Indonesian state-owned builder PT Waskita Karya was unable to repay 722 billion rupiah ($40 million) of bonds that fell due on Thursday, prompting a claim under an Indonesian government guarantee program that could test the country’s pandemic-era mechanism.

Indonesia’s government has paid bondholders the 722 billion rupiah ($40 million) owed to them after state-owned builder PT Waskita Karya failed to settle it last week, marking the first payout under a pandemic-era guarantee program for securities issued by state companies.

Flag carrier PT Garuda Indonesia’s finances deteriorated further just months after a $1.4 billion rescue by sovereign wealth fund Danantara, as surging fuel costs wiped out its remaining equity and added urgency to another share sale to shore up its finances.

PT Garuda Indonesia is planning to raise more debt and has negotiated longer payment terms with its main fuel supplier PT Pertamina, the airline said in an earnings call, as soaring oil and maintenance costs deepened losses.

Australia’s securities regulator temporarily barred Fidante Partners Ltd. from offering units in a credit fund, extending a clampdown on private credit investments amid concerns over risks to investors.

CNGR Advanced Material Co. is in talks to acquire a major Indonesian nickel plant, a move with the potential to transform the battery materials producer into one of the biggest players in the country’s smelting industry.

Indonesian officials plan to meet with MSCI Inc. executives on Monday, according to people familiar with the matter, after saying they were blindsided by the index provider’s threat to reclassify the country as a standalone market — a much more severe step than they thought was under discussion during months of talks.

At a meeting on Sunday afternoon involving officials from Indonesia’s Financial Services Authority and the country’s stock exchange, some attendees were surprised to see several prominent Instagrammers present.

Fallout from MSCI Inc.’s warning that it may remove Indonesia from its global equity indexes is spilling into corporate credit, causing risk premia on dollar bonds of local companies to widen to a six-year high over Asian peers.

MSCI Inc.’s threat to strip Indonesian equities of emerging-market status is now also weighing on dealmaking in the corporate bond market.