Indonesia said on Wednesday that it has set a record for sukuk – Islamic bonds – by raising $3.25 billion through a US-dollar-denominated issue with 5-year and 10-year tenures.
The 5-year notes carry a coupon of 4.40%, while the 10-year notes have a 4.70% coupon, below the sovereign’s initial price guidance, the Ministry of Finance said in a statement.
“The issuance … is the biggest global sukuk transaction by the government in history, an accomplishment achieved amid intraday (market) volatility,” the ministry said. Total order books reached $10.8 billion.
Indonesia usually taps the global sukuk market once every year and in 2021 it sold $3 billion worth of Islamic bonds.
Those bonds carried much lower coupons compared with notes with similar maturities offered on the most recent sale.
The 5-year and 10-year bonds sold in 2021 carried 1.5% and 2.55% coupon rates, respectively. Most of the buyers of the new issuance were from Asia and the Middle East.
CIMB, Deutsche Bank, Dubai Islamic Bank , HSBC and Standard Chartered Bank were the joint lead manager and joint bookrunner for the transaction.
HSBC and Standard Chartered Bank were also joint green structuring advisers. BRI Danareksa Sekuritas and Trimegah Sekuritas Indonesia acted as co-managers.
- Reuters, with additional editing by George Russell