Investor Interest Surges as Danantara Raises USD1.5 Billion from Global Bond Issuance
Investment Minister Rosan Roeslani has affirmed that foreign investors and global financial institutions continue to hold high confidence in Indonesia’s economic prospects. This positive sentiment is evidenced by the remarkable success of the inaugural global bond issuance by Indonesia’s superholding investment institution, Danantara.
During the initial book-building process, Danantara originally targeted raising fresh funds of USD 1 billion. However, interest from international investors surged, reaching USD 4.6 billion. Given the high level of oversubscription, the government took the tactical step of increasing the issuance volume.
‘We conducted book building with a plan to achieve 1 billion dollars, but the book building that came in was approximately 4.6 billion dollars. Seeing such high book building, we ultimately upsized or increased it from 1 billion to 1.5 billion USD,’ Rosan stated at the Presidential Palace complex in Jakarta.
Beyond raising funds above target, Danantara also managed to lock in highly competitive yields in the secondary market. The global bond was split into two tenors, each worth USD 750 million. The 5-year tenor was closed at a yield of 5.35 percent, while the 10-year tenor was set at 5.95 percent. The official signing of the issuance contract was completed on 11 June, and all proceeds from the issuance are scheduled to enter Danantara’s official account on 18 June.
Notably, Rosan revealed a shift in the investor portfolio for this global bond. Unlike previous Indonesian bond issuances, which were typically dominated by regional markets, the largest buyers of Danantara’s debt securities were major investors from the United States. For the 5-year tranche, 38 percent of investors came from the US, 41 percent from Europe and the Middle East, and 21 percent from Asia. For the 10-year tranche, 52 percent of investors were from the US, 31 percent from Europe and the Middle East, and 17 percent from Asia.