Foreign Investors Scramble for Danantara Bonds, Rosan Reveals Evidence

Minister of Investment and Downstreaming/Head of BKPM and CEO of Danantara Indonesia, Rosan Roeslani, has revealed the enthusiasm of investors for debt securities issued by Danantara. During his tour of global financial hubs including New York, London, Singapore and Hong Kong, Rosan said he met with 122 investors. He disclosed that from the planned US$1 billion issuance, global investors instead requested up to US$4.6 billion, meaning it was oversubscribed by more than three times the amount offered. “Seeing such high interest, we ultimately increased it from US$1 billion to US$1.5 billion, which is divided into 5-year and 10-year tenors,” Rosan stated at a press conference on Monday. In the roadshow to meet prospective investors, Rosan was assisted by several global investment banking giants including Morgan Stanley, HSBC and Citigroup. Danantara conducted its inaugural roadshow after obtaining ratings from agencies including Moody’s, S&P and Fitch. The debt rating obtained by Danantara is equivalent to the Indonesian government’s sovereign rating, which is investment grade. “Previously we had also received a rating from Pefindo, which was the highest rating, Triple A,” Rosan revealed. Besides securing demand that far exceeded the target, Danantara also achieved what are considered competitive coupon rates. The five-year tenor bonds were issued with a coupon of 5.35%, while the 10-year tenor was set at 5.95%. Interestingly, investors from the United States became the largest buyers in the bond issuance. For the 10-year tenor, 52% of investors came from the US, followed by Europe and the Middle East at 31%, and Asia at 17%. “The biggest enthusiasts and buyers were actually from the United States. Especially for the 10-year, 52% who subscribed to our bonds were from the United States,” Rosan said. He assessed that the high interest from global investors is tangible proof that international market confidence in Indonesia remains very strong. “This proves that investor confidence in Indonesia is real and exists,” he said.