Danantara’s Inaugural Global Bond Records Strong Results, Reinforcing Investor Confidence in Indonesia

Minister of Investment and Downstream Industry/Head of the Investment Coordinating Board (BKPM) and Chief Executive Officer (CEO) of Danantara Indonesia, Rosan Roeslani, delivers his statement at the Presidential Palace Complex, Jakarta, Monday (06/15) (Photo: BPMI of the Presidential Secretariat)

The Government has announced the positive outcome of Danantara Indonesia’s inaugural global bond issuance, which raised USD 1.5 billion. Minister of Investment and Downstream Industry/Head of the Investment Coordinating Board (BKPM) and Chief Executive Officer (CEO) of Danantara Indonesia, Rosan Roeslani, stated that the issuance exceeded the target initially set by the institution.

“From our initial target of USD 1 billion, the book-building process generated approximately USD 4.6 billion in orders. Given the exceptionally strong demand, we decided to upsize the issuance from USD 1 billion to USD 1.5 billion, divided into five-year and ten-year tranches,” Minister Rosan said in a statement at the Presidential Palace Complex in Jakarta, Monday (06/15).

Rosan further noted that the inaugural global bond issuance generated a positive response, following a series of visits to several financial centers, including Hong Kong, Singapore, Boston, London, and New York. During the roadshow, Danantara’s officials met with 122 global investors.

In addition to surpassing its fundraising target, Danantara also secured what Rosan described as highly competitive yields. The five-year bonds were priced at a yield of 5.35 percent, while the ten-year bonds were priced at 5.95 percent.

“These are truly excellent results. They also demonstrate the high level of investor confidence in Indonesia. This confidence is real and clearly evident,” he said.

Rosan explained that each of the two bond tranches successfully raised USD 750 million. He added that part of the issuance process has already been completed.

“We signed the transaction on June 11, and the funds will be credited to Danantara’s account on June 18,” he remarked.

Looking ahead, Rosan projected that Danantara could potentially issue bonds with maturities of up to 30 years. He attributed this prospect to strong investor appetite for Danantara’s instruments and confidence in Indonesia’s economic growth outlook.

“Investor appetite remains very strong because they view Indonesia’s growth as relatively stable. There are indeed ups and downs, as they are inevitable in economic cycles, especially amid geopolitical and geoeconomic developments. Such fluctuations are a normal part of any economic cycle,” he explained.

Rosan also highlighted the composition of investors participating in the global bond issuance, noting a particularly significant level of interest from the United States. It is an outcome that differs from previous historical patterns.

“For the five-year bonds, approximately 38 percent of investors came from the United States, 41 percent from Europe and the Middle East, and 21 percent from Asia. For the ten-year bonds, 52 percent of investors were from the United States, 31 percent from Europe and the Middle East, and 17 percent from Asia,” he stated. (BPMI of the Presidential Secretariat) (AY/TM)