Indonesia raises $2.5b in its largest global ‘sukuk’ offering

The Indonesian government sold $2.5 billion of sharia bonds to the global markets on Tuesday, the largest amount it has raised to date from what’s known as “global sukuk“.

The government sold $750 million of 5-year sukuk with a coupon at 3.4 percent, while the coupon it will pay for the $1.75 billion 10-year sukuk was set at 4.55 per cent, Robert Pakpahan, the finance ministry’s director general of financing and risk management.

Last year Indonesia raised $2 billion through global sukuk issuance with 10-year notes priced at 4.325 percent.

“The coupon is higher than last year because the situation is different – the Fed has raised its rates once,” Pakpahan said. “But in general, we are happy with the pricing.”

There were $8.6 billion of incoming bids for the two tranches of bonds, he said.

Pakpahan said the country initially wanted to get $2 billion from the sukuk issuance, but upsized it because of high demand from investors.

Sam Chan, executive director for Asia bond syndicate at Standard Chartered, was quoted as saying by IFR, a Thomson Reuters publication, “With oil prices recovering into the $40s, coupled with the positive momentum gained from ECB easing and the FOMC’s dovish message, Middle Eastern investors have seen increased risk appetite coming back into play.”

“They’ve been defensive in their investments and have been hoarding cash for a while but are getting more comfortable and are coming back to the market,” he added.

Jakarta will finance 24 percent of its 528 trillion rupiah ($40.08 billion) financing needs through foreign currency denominated bonds in 2016, Pakpahan said, lower than the initial plan of 30 percent.

The country raised $3.5 billion from conventional bond issuance in December 2015 to cover the 2016 financing needs.

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Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.