JAKARTA – Indonesia has raised 81 billion yen ($624.18 million) from a Samurai bond sale of three- to 10-year maturities, with proceeds to be used to help plug a fiscal deficit, the finance ministry said in a statement late on Thursday.

The bond sale came a week after the sovereign sold $3.25 billion of Islamic bonds in its biggest ever sukuk issuance.

The largest portion of the transaction for the Samurai bonds was the 68.2 billion yen sale of three-year bonds with a 0.96% coupon.

Jakarta also sold five-year bonds worth 5.1 billion yen with a 1.13% coupon, seven-year bonds with a 1.27% coupon amounting to 1.7 billion yen and 6 billion yen of 10-year notes with a 1.45% coupon.

The finance ministry said the sale was the biggest by a sovereign issuer in the Japanese debt market this year, amid choppy global market conditions due to the impact of global monetary tightening and rising geopolitical tensions.

Earlier this week, Finance Minister Sri Mulyani Indrawati said Indonesia had chosen to tap foreign debt markets for funding despite market volatility due to a ballooning budget for energy subsidies and social protection.

“Although today we have a budget surplus…the additional subsidies and compensation … have not been factored in,” Sri Mulyani told reporters.

The minister was referring to a $7 billion budget surplus recorded in the January-April period and contrasting it with recent changes to the 2022 budget after the government obtained parliamentary approval to hike energy subsidies by $24 billion.

“So we’re very opportunistic in seeing that (the market) was quite stable for a few days and we go in,” she said on Tuesday, after Indonesia began marketing the Samurai bonds.

($1 = 129.7700 yen)

(Reporting by Gayatri Suroyo and Stefanno Sulaiman; Editing by Ed Davies)

By Greg Roumeliotis and Anirban Sen

NEW YORK -Frontier Group Holdings Inc said on Thursday it has agreed to pay a break-up fee of $250 million in a bid to salvage its $2.9 billion acquisition of Spirit Airlines Inc that would create the fifth-largest U.S. airline.

The sweetening of the terms, first reported by Reuters, comes after proxy advisory firm Institutional Shareholder Services Inc (ISS) urged Spirit shareholders to vote against the deal with Frontier because Spirit failed to negotiate a break-up fee should U.S. antitrust regulators shoot down their deal.

“Given our conviction that regulators will find this combination to be pro-competitive, we have agreed to institute a reverse termination fee,” Frontier Chairman William Franke said.

JetBlue Airways Corp is trying to gatecrash the deal with a hostile $3.3 billion offer for Spirit that the latter has rejected, arguing regulators will not greenlight it unless JetBlue makes more concessions.

JetBlue, the sixth-largest U.S. passenger carrier, took its offer directly to Spirit shareholders last month by launching a tender offer.

“The addition of a reverse termination fee (by Frontier) in the face of a likely defeat is simply an acknowledgement that the regulatory profiles and timelines of both deals are indeed similar,” JetBlue said in a statement on Thursday.

Spirit shareholders are scheduled to vote on the deal with Frontier on June 10. It is not clear how Frontier’s concession on the break-up fee will change the ISS recommendation.

Frontier’s cash-and-stock deal valued Spirit at $25.83 per share when it was announced on Feb. 7. JetBlue’s tender offer is for $30 per share in cash, and the company has said its previous rebuffed cash offer of $33 per share is still on the table if Spirit decides to enter negotiations.

JetBlue has also offered to pay Spirit a $200 million break-up fee if regulators block its proposed deal.

U.S. airlines have been buoyed by the return of travel following the COVID-19 pandemic and have managed to keep ahead of soaring fuel and wage inflation by raising ticket prices. They may have to cut capacity, however, were the global economy to slip into recession as a result of central banks around the world raising interest rates to tame inflationary pressures.

(Reporting by Greg Roumeliotis and Anirban Sen in New York; Additional reporting by Radhikaa Anilkumar; Editing by Chris Reese and Sherry Jacob-Phillips)

TOKYO – Japan’s services sector activity grew at the fastest pace in half a year in May as consumer sentiment recovered further following the easing of coronavirus curbs, though high energy and material costs pushed up input prices by a record rate.

The final au Jibun Bank Japan Services Purchasing Managers’ Index (PMI) rose to a seasonally adjusted 52.6 from the prior month’s final of 50.7, with activity coming in well above the 50-mark that separates contraction from expansion.

The figure marked the fastest rate of expansion since November 2021 and was better than a seasonally adjusted 51.7 flash reading.

“Activity over the coming months looks set to be strong, as the levels of outstanding business rose at the sharpest rate since September 2019,” said Usamah Bhatti, economist at S&P Global Market Intelligence, which compiles the survey.

“That said, rising prices remained a slight drag on demand, as cost burdens rose at a record rate.”

Business in the sector saw overall input prices rise for the 18th straight month, citing a wide range of factors such as increased fuel and raw material costs.

The input price pressures lead them to charge more for services, partially passing on the higher cost to consumers, the survey showed.

The composite PMI, which is calculated using both manufacturing and services, rose to 52.3 from April’s final of 51.1 to mark the fastest pace of expansion in five months.

After seeing a contraction in January-March, the world’s third-largest economy is expected to rebound this quarter, likely growing an annualised 4.5% as the pandemic’s drag on consumer sentiment wears off.

The economy still faces risks from price rises of food and a wider range of consumer products that could crimp household spending and parts and high-tech chip supply disruptions that are hurting manufacturers.

(Reporting by Daniel Leussink; Editing by Sam Holmes)

SAO PAULO – Brazil President Jair Bolsonaro’s government said it aims to include state oil company Petrobras in its privatization program on Thursday, despite analysts calling it a long-shot for the far-right leader seeking reelection.

Rather than triggering privatization in itself, the move – not final until Bolsonaro signs a decree – would enable the country’s Investment Partnerships Program (PPI) to start evaluating the project less than six months before presidential elections.

Bolsonaro has been a harsh critic of Petrobras fuel pricing policy amid a surge in the cost of gasoline stoked by war in Ukraine that has become a hot topic in the run-up to the elections. He also floated the idea of splitting Petrobras into various pieces as a prelude to privatizing it this week.

He argued that the company was not fulfilling its “social function” as outlined in the Brazil’s constitution.

Analysts at BTG Pactual see the privatization as a “challenging task from a political perspective,” adding that in the short to medium term “this should be viewed with a great deal of skepticism.”

Petrobras’ privatization would also need to be approved by Congress, forcing Bolsonaro to rally disparate parties to win backing to do it.

According to the PPI’s special secretary, Bruno Leal, there is still no deadline for sending a Petrobras privatization bill to Congress and no defined schedule for any privatization process.

The company’s inclusion in PPI’s report was requested this week by the Mines and Energy Ministry.

(Reporting by Carolina Pulice and Peter Frontini; Editing by Chris Reese and Kenneth Maxwell)

By Paresh Dave

OAKLAND, Calif. -General Motors Co’s Cruise on Thursday became the first company to secure a permit to charge for self-driving car rides in San Francisco, after it overcame objections by city officials.

Self-driving test cars with human safety drivers have become a constant sight in San Francisco, and completely driverless ones are increasingly common too. Turning them into a fledgling business in a major U.S. city will mark a milestone in the long, delayed journey toward driverless taxi service.

The permit was Cruise’s final hurdle in California. Cruise said it would launch paid services within the next couple of weeks using up to 30 driverless Chevrolet Bolt electric vehicles.

The California Public Utilities Commission approved Cruise’s permit late Thursday in a 4-0 vote.

Commissioner Clifford Rechtschaffen said during the meeting the panel had been “taking a careful, incremental approach” to regulating autonomous vehicles.

“This resolution marks another important step in that effort,” he said. “It will allow our staff to continue to gather very important data that will support the development of future phases.”

Cars will be limited to a maximum speed of 30 miles per hour (48 km per hour), a geographic area that avoids downtown and the hours of 10 p.m. to 6 a.m. They will not be allowed on highways or at times of heavy fog, precipitation or smoke.

Disability and business groups had expressed support, and staff for the state commission had said Cruise’s proposal reasonably protects passenger safety.

Citing concerns that unusual behavior by the cars could result in bodily harm, San Francisco fire, police and transit officials wanted state regulators to impose restrictions before allowing Cruise into the ride-hailing business. They recommended requiring further approval to add more cars and a new working group of state and local officials.

The local officials said a confused Cruise AV briefly blocked a San Francisco fire engine in April that was en route to a three-alarm fire, and days earlier a driverless Cruise car stopped by police appeared to drive away before the officer was done. Cruise said its cars made safe decisions.

While rival Alphabet Inc’s Waymo has charged for rides in suburban Phoenix since 2018, Cruise’s proposed deployment in its hometown of San Francisco, a more densely populated, hilly and unpredictable area, is considered by tech experts the greater challenge.

Waymo has given employees driverless rides in San Francisco since March, and Cruise has offered free late-night test rides to the public since February.

But there also is a longstanding issue that self-driving cars cannot always correctly predict how humans will react to changing events, including the actions of the car. Cruise has even given the issue a name, the “couples problem,” a former employee said.

ACCIDENTS AND NEAR MISSES

A decade since California first allowed public testing of self-driving vehicles, smooth rides that follow traffic rules are the norm but surprises persist.

In a public presentation last year, Cruise senior director Brandon Basso described “kinematic uncertainty,” a challenge faced by self-driving cars in predicting actions of humans on the road and deciding, for instance, when to yield.

Cruise said its vehicles understand complex social dynamics and hedge against uncertainty by taking safe actions.

Even the San Francisco officials who challenged the permit said that despite “the conspicuous exceptions, the driverless Cruise AV appears to generally operate as a cautious and compliant defensive driver.”

Though self-driving cars can adapt to nearby rule-breakers, “human error or behavior such as a road rules violation that diverges from the probable behavior patterns is a factor in a disproportionate number of collisions,” Waymo told Reuters in a statement.

Cruise does not reveal what three former employees say are two key safety statistics internally: how often its cars encounter novel situations or experience what it calls “safety-critical incidents,” a combination of accidents and near-misses.

Public records seen by Reuters show Cruise with its computers in control suffered 34 accidents involving bodily harm or over $1,000 in damage across nearly 3 million miles of driving during a four-year span ended May 2021.

The documents, which Cruise unredacted in February in response to a request by Reuters, show its attempts to avoid repeat collisions.

For 28 of the cases, Cruise pursued technological fixes, which often were related to improving predictions of what humans will do. It also has relaxed some rules: including a response to a 2019 accident that allows the car to “adjust strict adherence to all marked lanes,” so that it could move around parked trucks or slow cyclists.

Waymo in January sought a court order to preserve the confidentiality of its comparable data, calling it trade secrets. The state did not oppose the request, and Waymo’s records remain redacted.

Some accidents have led to lawsuits. A bicycle courier and a scooter rider have sued Cruise, and Waymo settled over a 2016 car accident.

Cruise said the car was not self driving during the scooter incident and is fighting the case.

Bicyclist Christopher McCleary, who last month settled his lawsuit, said he has suffered ongoing injuries from crashing into a Cruise car that he said came to an unexpected halt in San Francisco in 2018, and he questions the experimentation of driverless cars in public.

“Unfortunately,” he said by email, “I feel like Cruise ‘learned’ from hitting me and this is actually a sacrifice I had to make to allow Cruise to become ‘better’ at predicting situations.”

(Reporting by Paresh Dave in Oakland, Calif.Additional reporting by Hyunjoo Jin in San Francisco and Tina Bellon in Austin, Tex.Editing by Peter Henderson, Matthew Lewis and Lincoln Feast)