Danantara Perdana Bond Issues US$1.5 Billion, Market Sends Signal to Indonesia

JAKARTA - Danantara brings home important news from the global market. The state-owned investment institution successfully issued the first global bond worth US$1.5 billion.

The value rose from the initial plan of US$1 billion. This is because investor interest is much greater than expected.

BPI Danantara Rosan Roeslani said the incoming demand reached around US$4.6 billion. The demand emerged after Danantara held a roadshow to Hong Kong, Singapore, Boston, London, and New York.

"This is real. On the 11th, it was signed and on the 18th, the funds were deposited into the Danantara account," said Rosan at the Presidential Palace Complex, Monday, June 15.

The bonds are divided into two. Each US$750 million for a 5-year and 10-year tenor. The 5-year tenor has a yield of 5.35 percent. The 10-year tenor is 5.95 percent.

Yield is the rate of return that investors ask for when buying debt securities. The higher the risk seen by the market, the higher the yield requested.

According to Rosan, before the issuance, there was an estimate that Danantara's yield could be above 6 percent, even 7 percent. However, the final figure was lower because of the interest of large investors.

He called the result as proof of investor confidence in Indonesia is still maintained.

There were 122 investors met by Danantara in the roadshow. For a 5-year tenor, the largest buyers came from Europe and the Middle East at 41 percent. United States 38 percent. Asia 21 percent.

For a 10-year tenor, US investors dominated 52 percent. Europe and the Middle East 31 percent. Asia 17 percent.

Rosan said this pattern was different from the usual. So far, bonds from Indonesia have usually been more sought after by Asian investors.

"The funds have entered the door. Now the next job is more difficult, namely ensuring that the money is managed carefully, openly, and produces real economic benefits.