Indonesia govt raises $2.5b from global sukuk issue, Middle East largest investors

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JAKARTA (TheInsiderStories) – The Indonesian Finance Ministry said it has raised US$2.5 billion from the launching of dual-tranche US dollar denominated Global Sukuk. In a formal statement, the Finance Ministry disclosed that majority of the investors that purchased the bonds were from Middle East followed by Asia (excluding Indonesia).

The price of the Global Sukuk was made on March 21, 2016 and was settled on March 29, 2016.

This is the first time the Indonesian government issued dual-tranche Global Sukuk, namely SNI21 series with tenure of 5 years and SNI26 with tenure of 10 years. The Global Sukuk was part of the Islamic Global Medium Term Notes (Islamic GMTN) program worth US$10 billion issued by the government and will be registered in the Singapore Stock Exchange and Nasdaq Dubai.

The first tranche (SNI21) is worth US$750 million  with a coupon rate at 3.4 percent, while the second tranche is worth US$1.75 billion with coupon rate of 4.55 percent.

The Global Sukuk, the Finance Ministry claimed, is the largest global sukuk issuance from Asian issuers and the largest so far by the Indonesian government.

The Finance Ministry said the global sukuk has been responded positively by global investors. The ministry has received indicative bids valued at US$8.6 billion.

Joint Lead Managers and Bookrunners in these transactions were CIMB Investment Bank Bhd, Citigroup (B&D), Deutsche Bank, Dubai Islamic Bank and Standard Chartered Bank. While Bahana Securities and Danareksa Sekuritas acted as Co-Manager.

The two global sukuk bonds were based on syariah principles and structured based on Wakakah principle. They are issued based on state-owned underlying assets in the form of land and building valued at 51 percent and the government projects 49 percent.

The Global Sukuk was issued by government owned entity Perusahaan Penerbit SBSN Indonesia III. The US$2.5 billion global sukuk has been given rating of Baa3 by Moody’s, BB+ by Standard & Poor and BBB- by Fitch.

Following is the details of the investors of the global sukuk issue

 

Series SNI21 SNI26
Tenure 5 years 10 years
Pricing Date 21 March 2016 21 March 2016
Nominal value US$750 million US$1.75 billion
Yield 3.400% 4.550%
Price 100% 100%
Settlement Date March 29 March 29
Investors Distribution
–          Middle East 42% 28%
–          Asia (excluding Indonesia) 31% 25%
–          Indonesia 10% 10%
–          Europe 15% 22%
–          US 2% 15$
Investors Distribution based on type of Investors
–          Assets/Fund Managers 40% 59%
–          Banks 38% 25%
–          Central Bank and Sovereign Wealth Funds 13% 8%
–          Insurance and Pension funds 5% 4%
–          Private Banks 4% 4%

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Source: The Insiderstories
Indonesia govt raises .5b from global sukuk issue, Middle East largest investors

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