Govt to issue sharia sovereign bonds worth US$2 billion

Govt to issue  sharia sovereign bonds worth US$2 billion

Logo of the Ministry of Finance (ANTARA FOTO/Hendra Nurdiyansyah)

Jakarta, (ANTARA News) - The Indonesian government is set to issue US$2 billion worth of State Sharia Sovereign Bonds (SBSN), or sukuk wakalah global, to continue its commitment to sustainable green financing.

The sharia sovereign bonds comprise two series with settlement date on Feb 20, 2019, the Directorate General of Financing and Risk Management at the Finance Ministry said in a press statement released on Thursday.

The first series, worth $750 million and with a tenure of 5.5 years, is issued at a yield of 3.9 percent and will become due on Aug 20, 2025.

The second series, worth $1.25 billion and with a tenure of 10 years, is issued at a yield of 4.45 percent and will become due on Feb 20, 2029. .

Each of the series has secured Baa2 rating from Moody?s Investors Service, BBB- from S&P Global Ratings, and BBB from Fitch Ratings.

The sukuk wakalah, with the registration code S/144A Trust Certificates, will be listed at the Singapore Stock Exchange and NASDAQ Dubai.

The bonds are supported by SBSN issuer Indonesia III, a legal entity which issues securities in accordance with sharia principles in foreign currency in the international market.

The sukuk wakalah, with a tenure of 5.5 years, is the second green sukuk which shows the commitment, leadership, and contribution of the Indonesian government with regard to climate change financing.

In addition, Indonesia, as the first issuer of Sovereign Green Sukuk, has proven its consistency to the Paris climate Agreement 2016.

The government has appointed Deutsche Bank AG, Dubai Islamic Bank PJSC, Maybank Investment Bank Berhad, PT Mandiri Sekuritas, and HSBC as green structuring advisor, joint lead managers, and joint book runners.

Meanwhile, PT Bahana Sekuritas, PT Danareksa Sekuritas, and PT Trimegah Sekuritas Indonesia Tbk will act as co-managers for the transactions.

Reporting by Satyagraha. Suharto
Editing by Eliswan Azly