The Daya Anagata Nusantara Investment Management Agency (BPI\nDanantara), through PT Danantara Investment Management (DIM), has issued\nglobal US dollar-denominated bonds for the first time. This move\nrepresents a crucial test of foreign investor interest in Indonesian\nassets amidst mounting domestic economic challenges.<\/p>\n
Citing Business Times based on Reuters marketing documents, the bonds\nhave two tenors, namely 5 and 10 years. Each series is targeted to raise\napproximately US$500 million, bringing the total potential issuance\nvalue to US$1 billion.<\/p>\n
During the bookbuilding process, Danantara set final price guidance\nat 5.35% for the 5-year bonds and 5.95% for the 10-year bonds. These\nyield levels are 35 basis points lower than the initial indications,\nwhich were around 5.7% for the five-year tenor and approximately 6.3%\nfor the ten-year tenor.<\/p>\n
The global debt issuance took place during a crucial period for\nIndonesia. A number of foreign investors are still scrutinising domestic\neconomic developments, particularly after the rupiah exchange rate came\nunder pressure recently. On the other hand, various policies by\nPresident Prabowo Subianto perceived as expansionary have also become a\nfocus for the market in gauging Indonesia\u2019s investment risk profile.<\/p>\n
In response to the weakening domestic currency, Bank Indonesia\npreviously took steps by raising its benchmark interest rate by 25 basis\npoints to 5.5%. The aim was to maintain rupiah stability after it\nbriefly touched a record low against the US dollar.<\/p>\n
Concerns are also mounting regarding the expansion of Danantara\u2019s\nmandate, as the state-owned enterprise wealth manager was recently\ntasked with becoming the sole exporter of palm oil, coal, and ferroalloy\nstarting next September through a newly formed unit.<\/p>\n
From a valuation perspective, Danantara\u2019s bond yields are above those\nof Indonesian government dollar bonds maturing in 2036, which last\ntraded at 5.6%. Meanwhile, PT Pertamina\u2019s US dollar bonds with a tenor\nuntil 2031 were recorded offering a yield of around 5.27%, based on LSEG\ndata.<\/p>\n
Proceeds from the US dollar bond sale will be used for general\ncorporate purposes, including investment and refinancing existing debt.\nThe bonds are issued under a US$5 billion Global Medium-Term Notes\n(GMTN) programme and are expected to receive a \u2018Baa2\u2019 rating from\nMoody\u2019s and \u2018BBB\u2019 from S&P and Fitch. The companies appointed as\njoint bookrunners and joint lead managers for the transaction are\nCitigroup, DBS, HSBC, Mandiri Securities, and Standard Chartered.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/danantara-issues-global-bonds-targets-us-1-billion-1781243445", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }