JAKARTA - The issuance of Danantara's first bond has an interesting story. Its largest buyer is not from Asia, as is the pattern of old Indonesian bonds, but from the United States.
Head of BPI Danantara Rosan Roeslani said US investors absorbed 52 percent of Danantara's bonds for a 10-year tenor.
"Usually the issuance of bonds from Indonesia is mostly from Asia. This is the opposite," said Rosan at the Presidential Palace Complex, Monday, June 15.
Danantara issued a global bond worth US$1.5 billion. This figure is up from the initial target of US$1 billion because investor demand reached around US$4.6 billion.
The bonds are divided equally. The 5-year tenor is US$750 million with a yield of 5.35 percent. The 10-year tenor is also US$750 million with a yield of 5.95 percent.
Yield is the return that investors receive from bonds. In simple terms, this is the "price" that bond issuers must pay for investors to put their money.
According to Rosan, Danantara previously had ratings from Moody's, S&P, and Fitch. For Moody's and S&P, Danantara's rating is said to be the same as the rating of the Indonesian government or sovereign rating. This means that the market assesses the risk to be equal to the country.
The dominance of US investors gives an important signal. The Western market does not close the door to Indonesia, although there was previously pressure on the rupiah and the stock market.
However, market signals are not free gifts. Investors enter because they see the business count, namely the risk, return, and direction of government policies.
Rosan said investors asked a lot of questions in the roadshow meeting. The questions were sharp. They wanted to see Danantara's policies, governance, and future investment plans.
At this point, Danantara got initial capital in the form of trust. But market confidence is always conditional. If the governance is loose, the market can quickly change its attitude.
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