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Indonesia launches $3 billion three-part dollar sukuk, term sheet shows

By Reuters News

By Shravya Marakini and Yantoultra Ngui

Nov 5 (Reuters) - Indonesia has launched a $3 billion three-part US dollar sukuk, or Islamic bond, with maturities of three, five and 10 years, according to an updated term sheet seen by Reuters on Friday.

  • The offering is split into a $500 million three-year tranche, $1 billion five-year tranche and $1.5 billion 10-year tranche

  • Southeast Asia's largest economy launched the three-year tranche at a yield of 5.450%, tightening from initial guidance of about 5.70%. The five-year tranche was launched at 5.850%, compared with initial guidance of about 6.10%, while the 10-year was set at 6.250%, versus initial guidance of about 6.55%

  • The bonds mature in November 2029, November 2031 and November 2036 respectively

  • The sukuk certificate gives investors shared ownership of underlying assets, with all holders ranking equally for payments

  • The bonds will be issued by Perusahaan Penerbit SBSN Indonesia III, with the Indonesian government acting as obligor

  • The bonds will be listed on the Singapore Exchange and Nasdaq Dubai

  • The government is rated Baa2 by Moody's, BBB by S&P Global Ratings and BBB by Fitch Ratings and the issues are expected to be rated similarly

  • The Republic intends to use the proceeds from the issuance for general financing requirements

  • Bank of America, Dubai Islamic Bank, HSBC, J.P. Morgan (B&D) and KFH Capital are leading the sale, while BNI Sekuritas, BRI Danareksa Sekuritas and Trimegah Sekuritas are co-managers

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